Keppel FELS cash flow gets boost from agreement with Borr Drilling, Transocean

KFELS B class jack-up rigs at Keppel FELS yard.
KFELS B class jack-up rigs at Keppel FELS yard. PHOTO: KEPPEL CORPORATION LIMITED

SINGAPORE - Keppel FELS has entered into an agreement under which Borr Drilling, an upstart Norwegian firm, will take over the contracts and remaining payments for an order made by Transocean.

In 2013, Swiss-based Transocean had ordered five KFELS Super B Class jackup rigs from Keppel FELS for US$1.1 billion (S$1.54 billion)and made a 20 per cent down payment.

Borr Drilling will take over the contracts and undertake the remaining payment installments to Keppel FELS.

The price for each rig is US$216 million, compared to the original price of US$219 million. Borr Drilling will also make a down payment of US$275 million.

The delivery dates of the five rigs were originally between 2016 and 2017 but had been deferred by Transocean to 2020.

The first three rigs will now be delivered between 2017 and 2018, while the remaining two rigs will be delivered in 2020.

This will enable Keppel to improve cashflow and minimise risks of the projects.

The agreement is part of a larger deal between Borr Drilling and Transocean, under which Borr Drilling will buy 15 drilling rigs from Transocean for US$1.35 billion.

These comprises 10 rigs from Transocean's current fleet and the five that are currently under construction.