Keppel sells 5 existing rigs to Borr Drilling for $1b

Keppel Offshore & Marine (Keppel O&M) has, through its wholly owned subsidiary, Keppel Fels, inked a master agreement to sell five jack-up rigs to Oslo-based drilling contractor Borr Drilling for around US$745 million (S$1 billion).

These are existing jack-up rigs that are being built by Keppel Fels to the KFELS B-class designs, said Keppel in a statement yesterday. The price excludes down payments made by the original owners.

Of the five rigs, two were originally built for Grupo R and one for Falcon Energy Group. Keppel Fels has already terminated contracts with the respective owners. The remaining two were being built in anticipation of potential demand.

Borr will pay a first instalment of US$288 million within 20 business days of the effective date of the master agreement, and the rest is payable within five years from the delivery date of each rig.

The rigs are due to be delivered from the fourth quarter of next year to the fourth quarter of 2020, with one rig to be delivered next year and four in 2020.

They are in addition to five jack-up rigs ordered from Keppel that Borr Drilling took over last year for US$216 million each after it acquired Transocean's entire jack-up fleet.

"The agreement with Borr Drilling demonstrates that rig owners continue to look for reliable, high-quality rigs to maximise efficiency and productivity," said Keppel O&M chief executive Chris Ong.

A version of this article appeared in the print edition of The Straits Times on May 17, 2018, with the headline 'Keppel sells 5 existing rigs to Borr Drilling for $1b'. Print Edition | Subscribe