Is This The Drillship Bargain Of The Century?

Published at 06:01PM - 25/04/16

Offshore drilling contractors, Ocean Rig, may just have bagged the bargain of the century, with a ultra deepwater drillship for a mere $65 million.

The 6th generation, Cerrado had previously been owned by Brazilian firm Schahin, prior to the company filing for bankrupt last year.

Corruption Leads To Collapse

Schahin had been one of Brazil’s most prominent industrial firms, with much of its interests lying in the nation’s civil construction projects.

However like many of Brazil’s larger companies, Schahin became embroiled in corruption scandals, that ended in its insolvency back in April 2015. The bankruptcy took the entire Schahin group down, included its offshore drilling arm.

Setting A New Low

Fast-forward a few months, and one of the now defunct company’s newest ultra deepwater drillships, the 6th generation Cerrado came to auction.

The Samsung Heavy Industries built, 2011 delivered, vessel was widely expected to go for a heavily knocked-down price; however ask any analyst prior to the hammer going down, and they would of put the final sale price at around US$200 – $250 million – roughly the same as the recently sold Deepsea Metro II.

Odfjell Drilling Deepsea Metro II
Odfjell Drilling Deepsea Metro II Drillship

The formally Odfjell Drilling owned Deepsea Metro II, itself a 2011 delivered ultra deepwater drillship, sold at auction back in March this year under similar circumstances. Its final sale price was a mere US$210 million, far below its build price of US$860 million.

The Metro’s sale value itself sent shockwaves though the offshore drilling industry, as a marker of how far the industry has fallen in recent years.

Drillship Bargain Of The Century

However looking at today’s announcement by the Cerrado’s new owners, offshore drilling contractors Ocean Rig, and the deal looks positively expensive.

With the average day rate of around US$750,000 for a driller of this capability only two years ago, a figure of US$65 million being published would have lead people to the conclusion that a drilling contract had been signed, not an entire drillship bought.

Cypriot headquartered Ocean Rig gave little detail away today, expect to say that they will rename the drillship- the Ocean Rig Paros upon its delivery.

The Paros will add to Ocean Rig’s current fleet of 13 ultra deepwater drilling units; 2 ultra deepwater semisubmersible drilling rigs and 11 ultra deepwater drillships.

Ocean Rig Paros

Delivered in 2011 to its original owners Schahin, the Ocean Rig Paros was built by Samsung Heavy Industries’ Geoje (Koje) Shipyard in South Korea.

Ocean Rig Paros has the design capability to operate in a maximum water depth of 10,000 feet (3,048m), and drill to a maximum depth of 40,000 (12,192m).