Keppel delivers rig to Mexican firm in sale, leaseback deal

Keppel Offshore & Marine (Keppel O&M) has delivered a jack-up rig to Mexican driller Grupo R as part of a sale and leaseback deal, it said yesterday.

The deal involves Grupo R entering an agreement with Fels Asset Co, a wholly owned subsidiary of Keppel O&M.

Fels Asset will buy the rig from Grupo R for US$179 million (S$241 million), or the equivalent of the balance contract value of the rig.

The rig will then be leased back to Grupo R at competitive day rates over five years, Keppel said.

Grupo R's parent company, IPC, will provide a guarantee on Grupo R's payment obligations.

The rig will work off Mexico, under an integrated drilling contract with Mexican state-owned oil firm Pemex, due to start in early May, Keppel added.

Keppel O&M chief executive Chris Ong said: "This transaction demonstrates how we are able to leverage the strengths of Keppel O&M to achieve win-win solutions for all stakeholders."

Grupo R CEO Jose Ramiro Garza added: "The fields where the rig will operate are expected to produce up to 210,000 bpd (barrels per day) of crude and 350 million mmcfd (million cubic feet per day)of natural gas by 2020, resulting in more opportunities for the rig to be deployed."

Keppel Corp shares closed 3.27 per cent up at $6.32 yesterday.

A version of this article appeared in the print edition of The Straits Times on February 21, 2019, with the headline 'Keppel delivers rig to Mexican firm in sale, leaseback deal'. Print Edition | Subscribe