Transocean To Delay Delivery, Defer Payments Of Newbuild, Ultra-Deepwater Drillships

Transocean To Delay Delivery, Defer Payments Of Newbuild, Ultra-Deepwater Drillships

Transocean Ltd. (NYSE: RIG) announced that it has agreed with Sembcorp Marine’s subsidiary, Jurong Shipyard Pte Ltd (JSPL), on the delayed delivery of the ultra-deepwater drillships Deepwater Atlas and Deepwater Titan. As part of the agreement, JSPL has agreed to accept deferred payment for both rigs.


The Deepwater Atlas and Deepwater Titan are the world’s first eighth generation ultra-deepwater drillships and only rigs to feature a 3,000,000 pound hook-load. These drillships are the most capable and highest specification rigs in the world and will include the first 20,000 psi well control system. In addition to their state-of-the-art drilling capabilities, these rigs are also designed and equipped to optimize fuel consumption, reduce emissions, and thus minimize the associated carbon footprint of each offshore project.


Deepwater Atlas: Delivery of the drillship is now expected to be in December 2021. Upon delivery, Transocean will make a $50 million payment to JSPL; the balance of payments owed to the shipyard, or approximately $370 million, will be payable during a five-year period following delivery pursuant to a secured financing arrangement with the shipyard. Transocean also has agreed with BOE Exploration & Production LLC (Beacon) that drilling operations on the Shenandoah project in the U.S. Gulf of Mexico are expected to commence during the third quarter of 2022. Transocean expects Beacon to commence drilling on its Shenandoah project utilizing the Deepwater Atlas following a final investment decision from Beacon and its partners. That decision is expected to be made on or before July 31, 2021.


Deepwater Titan: Delivery of the drillship is now expected to be in May 2022. Upon delivery, Transocean will pay JSPL 80% of amounts owed, or approximately $350 million. Twenty percent (20%) of amounts owed, or approximately $90 million will be deferred and payable over a five-year period following delivery pursuant to a deferred payment arrangement with the shipyard. Transocean also has agreed with Chevron U.S.A., Inc. (Chevron) that commercial operations of the Deepwater Titan are expected to commence in the first quarter of 2023. Transocean’s contract with Chevron maintains its duration and estimated backlog of $830 million, excluding mobilization and reimbursables.


Payments under each arrangement will be made in accordance with the respective payment schedules over the terms of each arrangement. Principal balances will carry an interest rate of 4.5% per annum.


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