The delivery dates have been rescheduled to December for the first vessel and May 2022 for the second due to the work disruptions that arose from the Covid-19 pandemic.
Under the agreements, Transocean will make a partial delivery payment upon the respective delivery of the vessels, followed by the deferred delivery instalment payments of the balance amounts payable under the contracts.
To date, Transocean has already paid 35% and 30% of the contract price for the first and second vessels respectively.
Under the first amendment agreement, Transocean will make a US$50 million ($66.2 million) payment to Jurong Shipyard upon delivery. It will then make the remaining sum of around US$370 million payable in quarterly instalments with accrued interest within five years from the delivery date.
All outstanding amounts are secured by a mortgage over the vessel and parent company guarantee issued by Transocean.
The first vessel is expected to commence drilling operations on the Shenandoah project in the US Gulf of Mexico with BOE Exploration and Production in the 2HFY2022.
Under the second amendment agreement, Transocean will pay Jurong Shipyard 80% of the amount payable upon delivery, which amounts to around US$350 million. The remaining 20% – or US$90 million – will be payable in quarterly instalments with accrued interest within five years from the delivery date. All outstanding amounts are secured by a parent company guarantee provided by Transocean.
The second vessel is expected to commence drilling operations with Chevron USA in the 1QFY2023.
Both vessels are the first set of next-generation drillships with ultra-deepwater drilling capability to be constructed in Singapore.
They are also the only drillships in the world with three million-pound hook-loads and are capable of 20,000 psi drilling operations.
They are designed to optimise fuel consumption and reduce emissions.
“The completion of the amendment agreements is a significant step forward and underlines the collaborative spirit of all parties and their determination to see two drillships built to the highest specifications for ultra-deepwater deployment be put into operation,” says Wong Weng Sun, President & CEO of Sembcorp Marine.
“In the face of challenges stemming from the Covid-19 pandemic, Transocean has demonstrated understanding of the situation and confidence in Sembcorp Marine’s EPC capabilities to complete the two highly complex drillship projects. Excluding these two drillships, Sembcorp Marine has delivered eight drilling rigs to Transocean,” Wong adds.
Both agreements are not expected to have any material impact on the company’s net tangible assets (NTA) per share and earnings per share (EPS) in the financial year ending Dec 31.
Shares in Sembcorp Marine closed flat at 20 cents on June 7.
