Keppel Bags USD 809 Million Drilling Rig Contract from Sete Brasil

Keppel Offshore & Marine Ltd, through its subsidiary Fernvale Pte. Ltd., has secured a contract worth approximately US$809 million from Urca Drilling B.V., a subsidiary of Sete Brasil Participações S.A., for the design and construction of a semisubmersible (semi) drilling rig based on Keppel’s proprietary DSSTM 38E design.

The DSSTM 38E is an enhancement of Keppel’s proven fifth generation deepwater solution, the DSSTM 38. With improved capability and operability, it is designed to meet the stringent requirements of the deepwater “Golden Triangle” region, comprising Brazil, Africa and the Gulf of Mexico.

Scheduled for delivery in 4Q 2015, the rig is intended to support the exploration of Brazil’s estimated 50 billion barrels of deep-sea oil and gas reserves1. Brazil is currently the world’s 11th largest oil producer and is expected to be in the top five by 2020. Its national oil company, Petrobras, has plans for $224 billion in capital expenditure from 2011 to 20152.

According to Sete Brasil’s Chief Executive Officer, Mr Joao Carlos Ferraz,“Keppel designed rigs have an established track record of operating efficiently in their respective fields and we are confident that the DSSTM 38E rig will be well suited for offshore Brazil. As we grow our fleet of drilling rigs to meet the demands of our customers, partnering reliable shipyards which can deliver quality rigs on time and within budget is an imperative for us.” Sete Brasil specialises in chartering drilling rigs for Brazil’s pre-salt exploration.

An innovative and cost-effective design, the DSSTM 38E is rated to drill to depths of 10,000 metres below the rotary table in 3,000 metres water depth. It is 108 metres in overall length, with a main deck size of 73 metres by 73 metres. Its operational displacement is approximately 45,000 tonnes.

The DSSTM 38E has accommodation facilities to house a crew of up to 160 men. It has both vertical and horizontal riser storage. The vessel is designed to stay in position via eight Azimuthing thrusters and the configurations comply with the American Bureau of Shipping Dynamic Positioned System (DPS-3) requirements.

Mr Chow Yew Yuen, Keppel O&M’s Managing Director and President of the Americas said, “We are proud that our proprietary DSSTM 38E design has been chosen by Sete Brasil as their first semi. It is an enhancement of the design from our first two drilling rigs built for Brazil, Gold Star and Alpha Star. The two rigs are now successfully operating in offshore Brazil and we are confident the DSSTM38E will follow in their footsteps.

“We are pleased to be able to partner Sete Brasil in developing drilling solutions for Brazil’s deepwater oil fields. Having delivered several key projects such as the P-52, P-51 and P-56 that have increased Brazil’s production capabilities, we look forward to developing rigs that will further boost Brazil’s offshore drilling resources.

“Having a proven shipyard in Brazil also ensures that we are able to satisfy any local content requirements. With a suite of proprietary deepwater drilling rig designs and more than 30 years of experience participating in Brazil’s oil and gas industry, we aim to provide cost-effective and value-added propositions for Brazil’s offshore and marine industry.”

Jointly developed and owned by Keppel’s Deepwater Technology Group and Marine Structure Consultants, the DSSTM 38E design is in the league of some of the world’s most advanced drilling semisubmersibles. The two DSSTM38 semis, Gold Star and Alpha Star, previously delivered by Keppel FELS to Brazil’s Queiroz Galvão Óleo e Gás (QGOG), are operating efficiently without disruption in offshore Brazil for Petrobras.

Keppel operates one of the most comprehensive shipyards, BrasFELS, in Brazil. The yard’s current projects include the repair and upgrade of Noble’s two Brazil-based drillships as well as the construction of the first Tension Leg Wellhead Platform (TLWP), P-61 for the Papa-Terra field in Brazil’s Campos Basin for Petrobras and Chevron.

The aforementioned contract price refers to Keppel O&M’s proposal submitted to Sete Brasil in July 2011. The contract mentioned above is not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.