Keppel Offshore & Marine (Keppel O&M), on May 9, announced that it has entered into agreements to use two KFELS B Class rigs to be deployed in Saudi Arabia.
The agreements were signed by Keppel O&M’s wholly-owned subsidiaries, FELS Asset Co 5 Pte. Ltd and FELS Asset Co 6 Pte. Ltd.
The bareboat contracts are expected to generate revenue of about $135 million for Keppel O&M. The amount includes the modification works to prepare the rigs for deployment
The two rigs will be chartered by ADES Saudi Limited Company for a period of five years commencing in 4QFY2022.
Chris Ong, CEO of Keppel O&M says, “We are pleased to secure bareboat charter contracts for two of our jackup rigs, riding on improving conditions in the oil and gas market.”
“These charters attest to the good demand for Keppel O&M’s proven state-of-the-art KFELS B Class rig in markets such as the Middle East where our proprietary design has established an unrivalled operational track record. With superior drilling efficiency and proven high performance, our modern KFELS B Class rigs are an economical and attractive proposition for operators and oil companies looking to ramp up exploration activities,” he adds.
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According to Keppel O&M, with data from Clarksons Research, the outlook for the jackup market is “optimistic”. Demand is also expected to increase from 2022 to 2023 on the back of strong activity from national oil companies.
“We continue to see strong demand for our rigs, and are actively pursuing more charters, as well as sales opportunities. Our early success at securing new bareboat charters will not only enable us to start generating revenue and cash flows from the legacy assets but also improve the overall marketability of our rigs as we build up their operational track records,” says Ong.
Shares in Keppel Corporation, Keppel O&M’s parent company, closed 10 cents lower or 1.473% down at $6.69 on May 9.
