Transocean strikes multiple rig deals with total backlog of $1.9 billion

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Offshore drilling contractor Transocean has secured new contracts and extensions in the U.S. Gulf of Mexico, North Sea, Suriname and Brazil for nine rigs in its offshore drilling fleet with an associated contract backlog of $1.9 billion.

The total backlog in Transocean’s previous fleet status report, covering the period up to 13 October 2022, was around $7.3 billion, however, thanks to the new deals with the aggregate incremental backlog of approximately $1.9 billion, the company’s total backlog is approximately $8.5 billion on 9 February 2023, when the firm published its quarterly fleet status report, detailing some of the recently announced deals and adding several new ones.

As previously reported, the Deepwater Corcovado drillship was awarded a four-year contract in Brazil by an undisclosed firm at a current rate of $400,000 per day, as adjusted for foreign currency exchange. This deal is expected to begin in August 2023 in direct continuation of the rig’s current contract.

Based on Transocean’s fleet status report from February 2023, this drillship is currently working for Petrobras in Brazil and is expected to finish this assignment in July 2023. The 2011-built Deepwater Corcovado drillship is of an Enhanced Samsung 10000 design. It was constructed by Samsung Heavy Industries in South Korea and can accommodate 205 people.

The rig owner also got a three-year contract for the Deepwater Orion drillship with an undisclosed player in Brazil at the current rate of $417,000 per day, as adjusted for foreign currency exchange. This deal is scheduled to start in November 2023. The 2011-built Deepwater Orion drillship has been idle since October 2019. It was constructed at Samsung Heavy Industries in South Korea. This drillship is of an Enhanced Samsung 10000 design and can accommodate 200 people.

Furthermore, Transocean secured a 910-day contract for the Dhirubhai Deepwater KG2 ultra-deepwater drillship with a national oil company for work offshore Brazil at a current rate of $439,000 per day, as adjusted for foreign currency exchange. The new contract is expected to start in August 2023.

Back in July 2021, this drillship was awarded a one-well contract, plus two one-well options, with Shell in Brunei. The contract was scheduled to start and end in December 2021 with a day rate of $190,000. The rig’s previous contract was with Woodside in Myanmar with a day rate of $250,000.

The 2010-built Dhirubhai Deepwater KG2 is a sixth-generation ultra-deepwater drillship of Samsung 12000 double hull design, which was constructed at Samsung Heavy Industries Geoje, South Korea. This drillship is capable of drilling in water depths up to 12,000 ft. It can accommodate 180 people and its maximum drilling depth is 35,000 ft.

Based on Transocean’s statement, the Deepwater Invictus ultra-deepwater drillship was awarded a new three-well contract with an estimated 100-day duration in the U.S. Gulf of Mexico with an undisclosed independent operator at $425,000 per day. This deal is slated to start in April 2023 in direct continuation of the rig’s current programme.

The drillship is currently working for Woodside in the U.S. Gulf of Mexico at $375,000 per day and the deal is slated to end in March 2023. This rig worked for Woodside from March 2022 until July under a day rate of $295,000. Afterwards, the day rate was $305,000 from July until October 2022. However, the day rate reached $375,000 in October and it is expected to remain at this level until March 2023.

The 2014-built Deepwater Invictus is a DSME 12000 ultra-deepwater drillship, which was constructed by DSME in South Korea. With a maximum drilling depth of 40,000 ft, this drillship is capable of drilling in water depths up to 12,000 ft. It can accommodate 200 people.

Moreover, Murphy Oil has exercised a one-well option for the Deepwater Asgard drillship in the U.S. Gulf of Mexico at $395,000 per day, following a one-well contract from September 2022. Therefore, the deal with Murphy is now expected to run until April 2023, when the rig will move to a one-year contract with an undisclosed operator in the U.S. Gulf of Mexico at $440,000 per day.

The 2014-built Deepwater Asgard is a DSME 12000 ultra-deepwater drillship, constructed at DSME in South Korea, which is capable of drilling in water depths up to 12,000 ft. It can accommodate 200 people and its maximum drilling depth is 40,000 ft.

According to Transocean, the Transocean Barents harsh environment semi-submersible rig was awarded a new one-well contract with an estimated 110-day duration in the UK North Sea at $310,000 per day. This deal is expected to begin in March 2023. Previously, this rig worked for Shell in Norway from January 2022 until October 2022 under a day rate of $282,000.

The 2009-built Transocean Barents rig is of Aker H-6e design. It was constructed at Aker Kvaerner Stord and can accommodate 140 people. The rig is capable of operating in water depths of up to 10,000 ft and its maximum drilling depth is 30,000 ft.

Back in September, Transocean Norge secured a 17-well contract in Norway at day rates between $350,000 and $430,000 after two oil and gas companies, Wintershall Dea and OMV, entered into an exclusive partnership with Transocean for the use of this rig for the drilling of all firm and additional potential wells in the period 2023 to 2027. The firm term will run from May until December 2023 while the incremental term of up to 863 days at day rates of $370,000 to $430,000 is subject to certain approvals.

Within its latest fleet status report, Transocean has confirmed that the previously disclosed options in Norway had been added to the backlog at current day rates between $414,000 and $424,000 per day, as adjusted for foreign currency exchange.

The Transocean Norge sixth-generation Moss Maritime CS60 semi-submersible rig was constructed at Jurong Shipyard in Singapore. This rig can accommodate 150 people and its maximum drilling depth is 40,000 ft.

In addition, TotalEnergies has exercised a one-well option in Suriname at $360,000 per day for the Development Driller III semi-submersible rig under a one-well contract with TotalEnergies at $345,000 per day plus two one-well options, which was disclosed in October 2022. This is expected to keep the rig busy until August 2023. Previously, the rig worked for Petrobras in Colombia under a contract with a day rate of $331,000, which ended in July 2022.

The 2009-built Development Driller III rig is of KFELS MSC Gusto DSS51 design and was constructed by KFELS in Singapore. With a maximum drilling depth of 37,500 ft, this rig has been designed to operate in water depths of 10,000 ft. It can accommodate 200 people.

The drilling contractor also explained that Harbour Energy exercised an eight-well option in the UK North Sea at $175,000 per day for the Paul B. Loyd Jr. harsh environment semi-submersible rig. The rig’s job with Harbour Energy started in December 2022 at $175,000 per day.

The 1990-built Paul B. Loyd Jr. rig is of Aker H 4.2 design and was constructed at Hyundai Heavy Industries in South Korea. It can accommodate 120 people and can operate in water depths of 1,969 ft. The rig’s maximum drilling depth is 20,000 ft.

In a separate statement, Transocean announced that one of its wholly owned subsidiaries had agreed to make an investment in Global Sea Mineral Resources NV (GSR), the deep-sea mineral exploratory division of DEME Group NV, in exchange for a non-controlling interest in the company.

This firm, which is engaged in the development and exploration of deep-sea polymetallic nodules that contain metals “critical to the growing renewable energy market,“ is a developer of nodule collection technology.

The offshore drilling player agreed to contribute the stacked Ocean Rig Olympia drillship for GSR’s ongoing exploration work, along with making a nominal cash investment and expects to contribute engineering services on an in-kind basis.

The company elaborated GSR would convert this rig for a system integration test scheduled for 2025 to validate the technical and environmental feasibility of recovering polymetallic nodules in ultra-deepwater on a commercial scale.

“The technical challenges associated with the recovery of deep-sea polymetallic nodules offer an opportunity to combine Transocean’s unique ultra-deepwater operating experience with GSR’s proprietary technology in polymetallic nodule collection to deliver a commercially viable nodule recovery enterprise for GSR,” outlined the offshore drilling giant.

The company points out that critical minerals found in deep-sea polymetallic nodules such as cobalt, nickel, copper, manganese, and rare earth metals are “essential” for many applications, including the production of high-capacity batteries.

Jeremy Thigpen, Transocean’s Chief Executive Officer, remarked: “GSR has an excellent leasehold position, and we are excited to support its team in the effort to meet global demand for the critical minerals necessary for a lower carbon energy economy.

“A mixture of all energy sources will be required to meet future global energy demands. Transocean’s work in deep sea minerals is another way we will continue providing essential offshore energy services.”

Meanwhile, the offshore drilling market has picked up speed in 2022, with offshore drilling contractors reaping the benefits presented by the increase in demand and higher day rates.

This is illustrated by the latest contract awards for the Transocean fleet and those recently announced by its rivals Valaris and Noble.

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