Transocean has been extremely busy the past few days solidifying its hold on the deepwater and ultradeepwater drilling market.

First, the drilling contractor announced it was selling 37 standard jackup rigs and one swamp barge for about $1.05 billion to a newly formed company appropriately named Shelf Drilling International Holdings. Shelf Drilling is sponsored equally by investors Castle Harlan, CHAMP Private Equity and Lime Rock Partners. Shelf Drilling will be run by a group of offshore drilling industry veterans. All but one are former Transocean executives.

Transocean is also negotiating with an undisclosed major operator for the charter of four ultradeepwater drillships to be built at a cost of about $3 billion and contracted for 10 years each.

While the sale of the shallow-water rigs won’t impact Gulf of Mexico drilling since all of them operate outside the U.S., it does point up Transocean’s continued strategy to focus on high-specification deepwater floaters and jackups. “This agreement marks an important milestone in our asset strategy to increase our focus on high-specification floaters and jackups, improving our long-term competitiveness,” Transocean president and CEO Steve Newman said in a statement accompanying the news release on the sale.

In a recent report, Barclays Capital said that the jackup sale “streamlines Transocean’s high-spec assets and provides substantial cash.”

Additionally, the drilling contractor announced that it is in discussions (as of Sept. 10) with an undisclosed major integrated international oil company for the construction of four DP ultradeepwater drillships that are expected to be able to operate in up to 12,000’ of water and drill wells to 40,000’. While Transocean didn’t say where the rigs might operate, there are enough clues to expect it will be in the U.S. Gulf of Mexico. For example, the rigs will be outfitted with enhanced well completion capabilities, a second blowout preventer (BOP), and have the capability to be upgraded to a 20,000-psi BOP.

Each rig would be contracted for 10 years, with charters beginning in 2015 and 2016. Construction cost is about $750 million each — a total of $3 billion. Barclays said the construction costs, which are about $100 million more than drillships currently under construction, likely is a result of “unique customer demands for high-spec equipment and designs.”

Transocean also is discussing alternative contracting scenarios with the unnamed operator that could include a joint venture with the customer that would own the drillships, provide a portion of the construction financing, and share in the anticipated profits.

Featured Content
Capt. Aaron Singh, Waterfront Director, New York Harbor School
Kim Carver interviews Capt. Aaron Singh, waterfront director of the New York Harbor School. Author: Kim Carver
October 16, 2014
Shipyards and mathematics
The lack of basic math skills is making it tougher to bring young adults into the shipbuilding industry. Author: Ken Hocke
October 16, 2014
The Jones Act moves industry and America's economic prosperity
The demand for Jones Act vessels is supporting 117 shipyards actively building ships as well as 200 shipyards currently engaged in vessel maintenance and repair. Author: Sound Off
October 16, 2014
A 'Bayworthy' tug
The 49.5' x 19' x 7.5' Capt. Kenneth can operate in any part of the Chesapeake in most sea conditions. Author: Kathy Bergren Smith
October 14, 2014
Be on the look out
Some say the Lyubov Orlova sank, but it could now be the new Flying Dutchman. Author: Capt. Peter Squicciarini
October 14, 2014

 
 
Diversified Business Communications