Global offshore drilling giant Transocean has set back the delivery date for five new jackup rigs by nearly four years.
In an agreement with rig builder Keppel Offshore & Marine's shipyard, Keppel FELS, delivery of the five Super B 400 Big Foot Class jackups will be deferred to from Q1 2020 in two- and three-month intervals.
Keppel FELS was awarded a contract for the five newbuilds in November 2013, near the height of the oil price market, following delivery of two previous Super B Class units. The contract was worth US$1.1 billion and the rigs were scheduled to be delivered progressively from 1Q 2016 to 3Q 2017. Transocean also had options for a further five similar units.
Transocean, like most of the offshore rig market, is suffering as oil prices continue to hover below US$40/bbl. The oil price collapse from $100/bbl in 2014 to an average $52/bbl in 2015 to around $30 so far this year gas resulted in oil and gas exploration companies slashing their budgets, including exploration spending. Clarksons Research recently said the current offshore rig market was "the worst in 30 years." According to Infield, of 686 mobile drilling units worldwide, only 471 were contracted, at a utilization rate of 68%.
Earlier this month, ratings agency Moody's issued a damning report on the health of some of the industry's top offshore drillers, following a review. It downgraded its credit ratings for six US offshore drillers, including Transocean, citing increasing financial leverage due to weak day-rates and rig utilization across the market. It also said Transocean has more new rig construction commitments than many of its peers, although the firm had been successful in defering many of these projects into 2019 and beyond.
Last month, Transocean said it would stack two of its ultra-deepwater drillships, due to current market conditions, resulting in the loss of about 200 jobs, on top of a tranche of rigs already lined up to be scrapped.
The KFELS Super B Class Bigfoot was designed with larger spud cans, to expand its operational coverage in more places, especially areas where soft soil is predominant. They are designed to operate in 400ft water depth and drill to 35,000ft.
They also have a two million pound drilling system and a maximum combined cantilever load of 3700 kips, as well as offline stand building, allowing drilling and the preparation of drill pipes to take place at the same time. The rig is capable of drilling at a 75ft outreach, allowing for coverage of a larger well pattern.
Keppel FELS and Transocean have a long-standing relationship, with Keppel FELS delivering various jackups and semisubmersibles, including the Development Driller III, an ultra-deepwater drilling semisubmersible rig built to Keppel's proprietary DSSTM 51 semisubmersible design. Other projects include upgrades and conversions of the Sedco 700-series semisubmersibles to enable dynamic positioning, and the repair of various Transocean rigs.
Image: A Super B Class at Keppel FELS. Image from Keppel FELS
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