SINGAPORE - AWILCO Drilling Plc has confirmed a US$425 million contract award to Keppel Offshore & Marine (O&M) for the construction of a mid-water, harsh-environment semi-submersible drilling rig.

The contract awarded to the offshore and marine arm of Keppel Corporation called upon the yard group to complete the rig construction in the first quarter of 2021.

Keppel O&M has also extended Awilco independent options towards the construction of three other newbuild rigs of similar specifications. These options are to be exercised within 12, 24 and 36 months, respectively.

Awilco has moved to confirm the newbuild order after completing a private placement intended to fund the rig construction. The firm had successfully raised gross proceeds of US$65 million from this equity-raising exercise.

Awilco's CEO Jon Oliver Bryce said that the newbuild order was placed with Keppel O&M on the back of growing activity in harsh-environment mid-water rig segment. Fleet utilisation for such harsh-environment rigs has been increasing, especially in the North Sea.

Keppel O&M's rig-building unit Keppel Fels was selected because as the world's leading rig builder, it is able to offer Awilco "a value-adding, unique solution", he explained.

"This newbuild rig will be purpose-designed with the latest technology, making it cost-effective for our customers. It will be the third semi-submersible to join our fleet. With the options to order another three rigs, we are well-positioned for the market recovery," he added.

Prior to winning this newbuild order, Keppel has already delivered three jack-up rigs to the same management team. Keppel O&M CEO Chris Ong said that the yard group has "worked closely with Awilco" to customise the rig specifications. Real-time data will be used in the rig's operations and maintenance and this will enhance its efficiency and robustness, he said.

Keppel Corp last traded at $7.73, down seven cents.