Samsung Heavy Industries (SHI) has managed to secure a two-year bareboat charter for a cancelled drillship newbuilding in a deal with Italy’s Saipem.
The South Korean shipbuilder said the vessel will be delivered in November 2021 and that there is an option to purchase the drillship by the end of 2022.
The 12,000-water-depth drillship has been renamed the Samsung Santorini. It is identified in the Clarksons database as the former Ocean Santorini, one of two rigs originally ordered by George Economou’s Ocean Rig.
“The bareboat charter of about two years duration allows Saipem to strengthen the competitiveness of its fleet without investing in new assets,” Saipem said in a statement.
The Italian company confirmed that it had an option, at its discretion, to purchase the rig but that it would “depend on the trend of demand”.
Marco Toninelli, chief operating officer of Saipem’s offshore drilling, said the deal featured an “innovative rental agreement” but gave no further details.
“Samsung Santorini enters the Saipem fleet…and expands its offering with one of the best latest generation drillships, capable of carrying out operations with the best safety standards and protection of the surrounding marine environment,” he said.
Contractual coverage
“Santorini increases our production capacity and allows us to meet the demand for new contracts at a stage in which Saipem's current offshore drilling fleet has almost full contractual coverage for the next few months.”
SHI has an inventory of five drillship newbuildings that it is said to be actively marketing which account for about 12% of its order backlog, according to analysts.
The drillships are two originally ordered by Seadrill, two by Ocean Rig and a fifth rig ordered by Pacific Drilling.
An SHI official said positive sentiment tied to the post-pandemic economic recovery, alongside rising oil prices, has stimulated demand for offshore development.
“We will push ahead with the sale of the rest of the inventory drillships as well,” he said. said.
Offshore drilling has been in a slump since 2015 due to a slide in oil prices, leading to a string of contract cancellation and leaving yards with unwanted assets.
In March, this year SHI was ordered to pay Stena Drilling $411m after it lost an arbitration tribunal in London over a cancelled drillship order.
Norwegian company Odfjell Drilling later bought the drillship in April 2018 for $505m and renamed it Deepsea Nordkapp.
However, SHI was on the winning side in October 2020 in a similar arbitration over Pacific Drilling’s disputed cancellation of its drillship newbuilding.
