Re: Rigs built on spec likely to easily find homes
This article is a couple weeks old, but gives a flavor on the rig market.
Norway Sevan's new deepwater rigs may find client in Brazil -CEO  Reuters – Thu, May 24, 2012 6:35 AM EDT
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By Charlie Zhu
HONG KONG, May 24 (Reuters) - Norwegian company Sevan Drilling's two ultra-deepwater oil rigs, now being built in China at a cost of more than $1 billion, are most likely to find a customer in Brazil to rent them next year, its chief executive said on Thursday.
China is emerging as a global competitor for deepwater oil rig manufacturing, posing a challenge to traditionally strong rig-making nations such as South Korea and Singapore.
The company, with total assets of around $1.5 billion, is confident it will find someone to rent the rigs, designed to drill in waters deeper than 3,000 metres, before they are completed, as the global deepwater exploration boom is expected to persist, especially in Brazil.
"Today Brazil is the largest user of deepwater services. They are the biggest client. So they could go there," Scott Kerr, chief executive of Sevan, told Reuters in an interview.
The Brazilian oil industry, backed by massive finds in its offshore deepwater in recent years, is expected to more than triple output to about 7 million barrels a day by 2020.
If the goal is reached, Latin America's biggest country could challenge the United States for the position of the world's No. 3 oil producer.
The two ultra-deepwater rigs, with a price tag of $526 million each, are being built by COSCO Shipyard in China, and are on track to be delivered in the fourth quarter of 2013 and the second quarter of 2014, respectively, he said.
"The rigs could also go to Africa or the Gulf of Mexico, but Brazil looks the most likely at the moment," Kerr said, adding that current day rates of more than $500,000 for deepwater rigs in Brazil bode well for the company.
"We are in good shape. We have rigs coming available in a strengthening market," said Kerr, speaking on the sidelines of an oil conference in the southern Chinese city of Guangzhou.
Sevan Drilling was spun off by Norwegian company Sevan Marine and listed on Oslo's secondary Axess market for smaller companies a year ago, following an initial public offering raising $363 million.
Sevan's new largest shareholder, Seadrill, a major international offshore oil driller, has announced it would consider selling to a third party its stake of 28.5 percent in Sevan or merge the company with its Brazilian drilling unit Seabras, which is seeking to raise nearly $1 billion this year in a local initial public offering, he added.
"We would continue to grow the company (Sevan Drilling). But at $500 million a rig, we need to do it at the right pace to sustain the capital market. As a small listed company, this is a business that takes a lot of capital and consolidation could occur," Ker r said.
Sevan Drilling's other two rigs were also built by COSCO Shipyard and cost $700 million and $685 million, respectively, he said. Unlike the two rigs now under construction, the first two were contracted to Brazil's Petrobras right after Sevan placed orders with COSCO Shipyard.
Chinese rig builders command a cost advantage and are also able to obtain financing support for potential customers from Chinese state banks, industry sources say.
The cost of the two rigs currently built by COSCO is lower because the state-run Chinese company provided financing that helped lower financing costs for Sevan Drilling, Kerr said.
It will take COSCO Shipyard 28 months to complete work on the two rigs, compared with 30 months they spent on the previous two, as the Chinese company is getting more experienced, he added.
Chinese companies such as Shanghai Waigaoqiao Shipbuilding Co Ltd and China International Marine Containers (Group) Co Ltd have built and delivered deepwater rigs for domestic companies such as CNOOC Ltd. (Editing by Clarence Fernandez) |
