Transocean’s Deepwater Atlas has been booked to drill the Shenandoah project in the US Gulf of Mexico from Q4 2022 under an agreement with Beacon Offshore Exploration and Production
The repeatedly delayed build of Transocean’s pair of ultra-deepwater drillship vessels has come closer to its finishing line with the delivery of the first of the two vessels.
Announcing the first of the two vessels’ delivery, Sembcorp Marine said, "Deepwater Atlas represents a breakthrough in the industry with leading-edge capabilities for enhanced operational safety, efficiency and performance. With capacity to accommodate a crew of 220, the drillship is designed and equipped to optimise fuel consumption and lower emissions."
Among Deepwater Atlas’ and Deepwater Titan’s list of superlatives is their individual capabilities of operating at 3,650 m of water depth, drilling to depths of 12,000 m, accomodating well control systems up to 20,000 psi (pounds per square-inch pressure) for drilling and completion operations and a 1,360,000 kg hook-load hoisting capacity.
Transocean negotiated deferrals for US$460M in payments on the build costs for the two dynamically positioned drillship vessels Deepwater Titan and Deepwater Atlas in July 2021. When the deferred payment arrangements were agreed with Sembcorp subsidiary Jurong Shipyard, Transocean hailed the deal as a ‘monumental achievement’.
Transocean is one of a handful of offshore drillers who managed to survive without undergoing bankruptcy or restructuring during the pandemic.
Transocean signed the original two-vessel build deal with Sembcorp Marine in 2014, at a cost of US$540M per vessel, with initial deposits. Under the new deferred payment terms, Transocean agreed to pay US$50M upon delivery of Deepwater Atlas, with the remaining balance of US$370M paid in instalments over five years. For Deepwater Titan, Transocean will pay 80% of the balance owed, US$350M, leaving the final US$90M to be paid over five years.
Deepwater Atlas was due for delivery December 2021, arriving some seven months later. The vessel has been booked to drill the Shenandoah project in the US Gulf of Mexico from Q4 2022 under an agreement with Beacon Offshore Exploration and Production.
Deepwater Titan was originally expected to begin work in 2021 and to be delivered in May 2022 but only completed its drydocking phase in February 2022. Once complete, Deepwater Titan is booked in to begin drilling operations with Chevron USA Inc in Q1 2023. Deepwater Titan’s contract with Chevron, signed in 2018, remains intact, according to Transocean. The vessel will work in the Gulf of Mexico under a five-year contract with an US$830M backlog.
Pandemic-related financial woes took the blame for delays on the two-vessel build project in Singapore’s Sembcorp Marine group, which announced some US$480M in losses midway through 2021. Those losses, they said, reflected “the significant impact of the ongoing Covid-19 disruptions which have caused delays and increases in manpower and other related costs to complete its projects”.
In June 2021, Sembcorp announced it had signed a non-binding memorandum of understanding with another Singaporean shipbuilding group, Keppel Offshore & Marine, which began its own restructuring in January 2021, announcing a shift into the renewable energy sector.
“The potential combination is in response to dramatic changes in the global O&M engineering and energy sectors, which are seeing a major global transition away from oil,” a Sembcorp statement said at the time.
In April 2022, Sembcorp signed an O&M spin-off and merger agreement with Keppel Corp based on a 50:50 enterprise value ratio between Keppel Offshore & Marine and Sembcorp Marine. The merger is subject to various regulatory approvals and is expected to be put to respective shareholders for approval in Q4 2022.
Source: Riviera Marine
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