Transocean awarded billion dollar drillship contract

Offshore drilling contractor Transocean has been awarded a five-year drilling contract for a newbuild Enterprise-class drillship in Houston.

The five-year, US$1.01 billion contract will commence in the fourth quarter of 2010, following shipyard construction, sea trials, mobilization and customer acceptance. The contract may be extended to seven or ten years at the client's request, bumping revenue to US$1.35 billion to US$1.85 billion. If extended to 10 years, the client may elect to have the day rate fluctuate based on crude oil prices, adjusted upwards if crude is between US$75 and US$100 per barrel with a maximum adjustment of ten percent if crude oil is at or above US$100 a barrel. A Transocean subsidiary has executed a shipyard contract with Daewoo Shipbuilding and Marine Engineering to construct the double-hull drillship. Construction is scheduled to take place at Daewoo's shipyard in Okpo, South Korea, where four other Transocean Enterprise-class drillships are being constructed. The rig will feature dual drilling technology, a variable deckload of 20,000 tons and be capable of drilling in up to 10,000 feet of water.

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