Transocean cancels order for Ocean Rig drillship duo

Offshore drilling contractor Transocean has cancelled the orders with Samsung Heavy Industries for two Ocean Rig drillships under construction.

The drillships in question – the Ocean Rig Santorini and the Ocean Rig Crete – were ordered by Ocean Rig, a drilling contractor bought last year by Transocean in a $2.7B deal. 

The transaction added eight high-specification ultra-deepwater drillships and two harsh environment semi-submersibles to the Transocean fleet.

In addition, the acquisition included two high-specification ultra-deepwater drillships, the 7th generation Ocean Rig Santorini and the 8th generation Ocean Rig Crete, under construction at the Geoje Samsung shipyard in South Korea. After some delays, the two drillships were estimated to be delivered in 3Q 2019 and 3Q 2020, respectively.

However, Transocean on Monday said its indirect subsidiaries would relinquish their respective interests in the two drillships under construction to Samsung Heavy Industries.

“Upon relinquishment of the drillships, Transocean’s indirect, wholly-owned subsidiaries will not make further payments to SHI under the construction contracts,” Transocean said.

“The total estimated future costs associated with the delivery and placing the drillships into service would have been approximately $1.1 billion, which includes future payments to SHI under the construction contracts and costs related to spares, materials, and supplies, and to the commissioning and mobilization of the rigs. The construction contracts are not guaranteed by Transocean Ltd. or any of its affiliates,” the drilling contractor said.