SBI Offshore building five jack-up rigs for unknown China-Middle East consortium

Submitted by Paddy Harris on Wed, 2014-08-27 10:03

27th August 2014

SBI Offshore Limited has announced that the Middle East-Chinese consortium, which recently awarded its subsidiary a contract to provide design and engineering services for a jack-up drilling rig, has commenced discussions with SBI Offshore to build up to five rig units

SBI Offshore building five jack-up rigs for unknown China-Middle East consortium

The price of each rig will depend on its specifications, equipment type and make, fabrication yard, delivery and financing terms

SBI Offshore said that it had commenced negotiations with the consortium about a week after securing from the latter the USD 24m contract to design a rig that will meet American Bureau of Shipping Classification (A1 Self-Elevating Drilling Unit) requirements.

“SBI Offshore has entered a new phase of growth,” said Chan Lai Thong, executive chairman of SBI. “The recently concluded design and engineering contract serves as a catalyst for the group to secure larger onshore and offshore oil and gas projects. We are hopeful of a successful outcome in our negotiations for the Rigs and intend to secure more of such higher-value projects in the future,”

The consortium, whose members are involved in oil and gas activities, has indicated that the rigs will eventually be deployed in the Middle East and various parts of Asia for operation in water depths of up to 110 metres.

The price of each rig will depend on its specifications, equipment type and make, fabrication yard, delivery and financing terms.

If negotiations are successful, SBI expects to build the first rig in a regional shipyard, possibly in China or Singapore. Each rig will take at least two years to build and all the rigs are expected to be completed in about six years.

Subject to the finalisation of the rig’s specifications under the design and engineering contract as well as the confirmation of the construction start date of the first rig, SBI expects financial contributions – from rig-building, project management services and sale of equipment – to commence in the financial year ending 31 December 2015.

As announced on 2 July 2014, SBI has formed a 70 per cent-held joint venture, Axon Rig Concept and Design Asia Pte. Ltd. (ARCDA), with US oilfield equipment manufacturer, Axon Energy Products, to provide integrated solutions for drilling equipment and systems.

Leveraging on ARCDA, SBI is actively discussing with various yards in the region to offer its drilling equipment systems and services, as well as with energy resource players in the Middle East and the former Soviet Union for possible collaborations.