Sevan Drilling Drops Newbuild Options. Focuses on Marketing Rig Under Construction

Sevan Drilling, a Norway-based drilling contractor which owns a fleet of Ultra Deepwater drilling rigs of a specific cylindrical design, yesterday, during its Investor Day presentation announced it would not take options for the rigs 5. and 6. at Cosco shipyard.

The company’s representatives said they wanted to focus on securing a contract for its rig 4. which is currently under construction at the Chinese shipyard. The rig  is 56% complete and is on track to be delivered in the second quarter of 2014.

Sevan Drilling said it hoped to clinch the deal for the rig within 2013 so it could begin the work immediately upon delivery.

The Oslo-based company said it would focus on marketing the rig in the U.S. Gulf of Mexico and Brazil.

The reason for focusing on these areas is the fact that the drilling contractor already has rigs contracted in Brazil and the U.S. It’s two rigs are already working for Brazil’s state controlled oil company Petrobras, and just last week, the U.S. oil firm LLOG hired the still under construction rig ‘Sevan Louisiana’ for work in the U.S. Gulf of Mexico.

Rigs 5. and 6. options & Mark II

During the presentation the management said they are not necessarily against the construction of new rigs, but because the options previously agreed with Cosco were for the building of the drilling units which would be of the exactly same type as the previous ones, they decided against these options.They added that Sevan Drilling is working on a new rig design called “Mark II” with Cosco. Compared to the previous rigs with bed space for 150 people, the new rig would be able to accommodate a crew of 200 men. It was also said that the vertical storage of the risers has been discussed.

Future

For the outlook, the management said that the company’s aim is to move from a project company to an operation company and operational excellence, because the company’s technology and construction are now proven by the contracts already secured, and they are certain of having a highly competitive product in their young ultra deepwater fleet.

To explain better, they said they wanted to move from being “a project company with operation” to “operation company with projects”, the first meaning 1 operating rig and 3 under construction, the second, 4 rigs in operations.