KHZ To Buy Semisubmersible

Keppel Hitachi Zosen Limited (KHZ) is in discussions with Smedvig Asia regarding the latter's intention to exercise its option to purchase KHZ's interest in the semi-submersible tender rig, West Alliance, presently under construction in Keppel Shipyard. The purchase price is approximately $61.5 million. Smedvig has proposed to exercise the option after delivery of the tender rig and after commencement of operations under its drilling contract with Esso Malaysia, which was secured recently and is for a period of one year plus one optional year. Smedvig has announced that start-up of drilling operations is scheduled for early November this year. The construction of West Alliance is proceeding according to schedule. The unit is based on a design and specifications similar to that of Smedvig's newest semi-tender rig West Menang, which was built by Keppel Shipyard in 1999. However, West Alliance is improved to accommodate increased deckload capacity and larger accommodation facilities. It is also designed for deepwater drilling operations in combination with floating wellhead platforms in benign waters.