Keppel, Consortium Secure Jackup Contract
Keppel Kazakhstan LLP (Keppel Kazakhstan) and its consortium partner Ersai Caspian Contractor LLC, Kazakhstan (Ersai Caspian Contractor), have secured a contract from Teniz Burgylau LLP (Teniz Burgylau), an indirect wholly-owned subsidiary of JSC NC "KazMunayGas" (KazMunayGas) of Kazakhstan, for a KFELS B Class jackup rig worth US$242 million.
Scheduled for delivery in 1Q 2015, the jackup rig will be deployed in the Caspian Sea when completed. The work scope of the rig will be shared equally among the two members of the consortium. According to the Oil and Gas Journal dated January 2010, Kazakhstan's proven oil reserves was estimated at 30 billion barrels and its natural gas reserves at 85 trillion cubic feet.
Mr Chow Yew Yuen, Chief Operating Officer of Keppel Offshore & Marine (Keppel O&M) which is a 50% shareholder of Keppel Kazakhstan, said, "We are pleased that Kazakhstan's Teniz Burgylau has placed their confidence in our yard in Kazakhstan and in our proven KFELS B Class design. With Kazakhstan's vast oil and gas reserves, our yard in Kazakhstan, which has been operating in Aktau since 2003, stands ready to support the country as it unlocks and realises its production potential.
"Together with our consortium partner, we at Keppel look forward to delivering a high quality rig to Teniz Burgylau safely, on time and within budget. With 34 rigs in operation and another 19 on order, the KFELS B Class design has been the rig of choice for drilling."
Mr Nurlan Bekzhanov, General Director of Teniz Burgylau said, "Kazakhstan aims to steadily increase its oil and gas production to become one of the world's top oil and gas producers and exporters. Teniz Burgylau is grateful to its shareholders KazMunayGas and KazMunayTeniz for the given opportunity to contribute towards this target by stepping up our drilling operations. For our rig, we have decided on the KFELS B Class jackup design as it is an industry benchmark for such rigs. With the established track record of Keppel O&M as the world's leading offshore rig designer and builder, and its presence in Kazakhstan, we believe we have chosen the right partners to provide our first jackup drilling rig."
This KFELS B Class jackup, designed for the Caspian Sea, is able to operate in water depths of 262 feet, upgradeable to 400 feet, and can drill to depths of a maximum of 20,000 feet. This rig will incorporate Keppel's advanced and fully-automated high capacity rack and pinion elevating system, and Self-Positioning Fixation System. It will provide maximum uptime with reduced emissions and discharges.
Keppel Kazakhstan's track record of projects include the fabrication of a series of Pipe Rack Modules, Pontoons, Hook Up Structures and the building of seven Ice Class Self Ballasting Transportation Barges for Agip Kazakhstan North Caspian Operating Company (Agip KCO), for the Kashagan field development. Keppel Kazakhstan is also the first yard to launch a steel floating vessel into the Caspian Sea in Kazakhstan.
The above contract is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited (KPELF) for the current financial year.