Keppel O&M Secures Three-year Bareboat Charters for Jack-up Rig Duo

Singapore's Keppel Offshore & Marine has secured bareboat charters for two KFELS B Class rigs to be deployed in the Middle East.

The shallow-water drilling rigs will go on a charter with an unnamed drilling firm in the Middle East. Keppel said the charterer was  "an established drilling company."

The three-year charter is expected to start in the fourth quarter of 2022. The client will have options to extend the charter for another year.

According to Keppel O&M, the total revenue from the charters, including the options and modification works by Keppel O&M to prepare the rigs for on-site operations, is expected to be up to S$120 million ($87,34 million).

The contracts come on the back of two bareboat charters by Keppel O&M announced on May 9, 2022, for newbuild rigs that were not delivered to the original buyers. Keppel said that the recent rig charters reflected the growing demand for its high-quality jackup rigs amidst the improving oil and gas market.        

Chris Ong, CEO of Keppel O&M, said, “We have built a strong track record and trust in the industry for delivering rigs that are robust, versatile and capable of working in a wide variety of geographies. The multiple charter contracts that we have recently secured reflect the improving market sentiments, and attest to the value we are able to provide to rig operators with our proven KFELS B Class rigs.

“With jackup utilization rates increasing, we are also seeing demand for rig charters and sales enquiries improve. Putting the legacy rigs to work will improve the overall marketability of these assets while reducing holding costs. As we secure more bareboat charter contracts, our legacy rigs will become increasingly valuable to both rig operators as well as potential investors.”  

"The two rigs to be used for these charters will be from the terminated newbuild rig contracts with certain customers that Keppel O&M had announced on April 13, 2022," Keppel O&M said. To remind, the company on April 13 terminated contracts with an affiliate of Clearwater Capital Partners, and Fecon International, for four rigs ordered in October 2013 and February 2014, respectively.

"As part of the definitive agreements Keppel Corporation has signed in connection with the proposed combination of Keppel O&M and Sembcorp Marine, these two rigs and their bareboat charter agreements are part of Keppel O&M’s legacy rigs and will be transferred to Asset Co  that is majority-owned by external investors on legal completion," Keppel, which last year said it would exit the offshore rig building business, said

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