West Alliance News

Keppel Hitachi Zosen (KHZ) has delivered a Semi-Submersible Self-Erecting Tender Rig (SSETR) to Smedvig Asia Ltd (Smedvig). The SSETR was named West Alliance by Mrs. Patricia Chan, wife of Mr. Chan Heng Wah, Drilling Manager of Esso Production Malaysia Inc, at a naming ceremony held in Keppel Shipyard on September 29, 2001. West Alliance has a one plus one optional year drilling contract with Esso Malaysia, which is scheduled to commence in early November this year. Following the exercise of its option, Smedvig will own 100 per cent of West Alliance, and bring the total capital expenditure of the rig to about $85 million. West Alliance represents the newest generation of SSETRs, incorporating the latest technology and equipment.

Smedvig Asia has exercised its option to purchase Keppel Hitachi Zosen’s (KHZ) interest in the semi-submersible tender rig, West Alliance, for US$61.5 million on November 2, 2001. In mid August this year, Smedvig Asia had announced its intention to purchase KHZ’s stake in the rig once the vessel commences operations. With the exercise of its option, Smedvig Asia now owns 100 percent of West Alliance. West Alliance, now deployed in East Malaysia under a contract with Esso Malaysia, was successfully built and delivered by Keppel Shipyard, a member of the Keppel Group, in October 2001.

Smedvig has entered into an agreement with Keppel Shipyard in Singapore for the purpose of building a new semi-submersible self-erecting tender rig (semi-tender). Total capital expenditure for the new semi-tender is estimated at $ 94 million, of which Smedvig's share is approximately $ 29 million. The agreement with Keppel Shipyard is based on the principle that Keppel shall build and own the the semi-submersible hull, and Smedvig shall own the derrick equipment set. Smedvig shall for a period of ten years be responsible for marketing, management and operation of the unit. The agreement includes an option for Smedvig to purchase the semi-submersible hull during the ten-year period at a pre-agreed price.

Keppel FELS Limited has entered into a cooperation agreement with Smedvig Asia Limited (Smedvig Asia) to build a Semisubmersible Drilling Tender (SSDT) with Keppel Offshore & Marine’s proprietary design. Developed by the Deepwater Technology Group (DTG), the KFELS SSDT3600-GOM-C42 will be the fourth vessel in the series of successful SSDTs that have been gainfully deployed in this region. Valued at $94 million, Keppel FELS and Smedvig Asia will own and operate the ultra deepwater semi tender on a 72/28 basis respectively. The newbuild is due for completion in the third quarter of 2005.

Keppel FELS Limited (Keppel FELS), a wholly-owned subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), will divest its entire 72 percent interest in the rig, West Berani, to SeaDrill Asia Limited (SeaDrill Asia) for approximately $72m. This divestment follows the completion of the semisubmersible drilling tender (SSDT), which was delivered on time today. In May 2005, Keppel FELS entered into an agreement with SeaDrill Asia, formerly Smedvig Asia, to own and operate the SSDT on a 72/28 basis respectively. SeaDrill Asia had the option to exercise Keppel FELS’ interest in the rig upon completion. This is the fifth deepwater tender drilling rig that Keppel has built for SeaDrill Asia since 1994.

Keppel Hitachi Zosen Ltd said on Friday that Smedvig Asia intends to exercise its option to purchase the Singapore ship repair specialist's interest in a tender rig for $61.5 million. Keppel Hitachi said in a statement that Smedvig, a unit of Norway's Smedvig ASA, proposed to exercise its option after delivery of the semi-submersible tender rig West Alliance and after commencement of drilling operations.

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.