Ocean Rig Postpones Drillship Deliveries

Published at 08:22AM - 12/08/16

Offshore drilling firm Ocean Rig has reached an agreement with Samsung Heavy Industries (SHI) to postpone drillship deliveries and reschedule instalments for the rigs currently being built in South Korea.

According to the company’s financial and operating results for the second quarter of the year, the deal provides for the delivery of the first two of the drillships.

“Despite the continued positive operational performance of the Company (fleet utilisation for the second quarter of 96.3%), the market conditions remain extremely negative,” Ocean Rig Chairman and Chief Executive Officer, George Economou, said.

Ocean Rig Postpones Drillship Deliveries

The three drillships SHI is due to deliver are Ocean Rig Santorini, Ocean Rig Crete and Ocean Rig Amorgos.

“Oil companies continue to reduce their offshore budgets and as more floaters come off contract in the next six months, an already grossly oversupplied market is expected to worsen,” he added.

Ocean Rig Postpones Drillship Deliveries
Ocean Rig Olympia has seen its contract terminated with ENI

“In this current and anticipated poor market environment which we expect to persist for an extended period of time, we believe it is prudent to focus on maintaining liquidity and de-levering the company,” he stated further.

Ocean Rig to Increase Stacked Rigs Figure

The company reported a net income for the second quarter of 206 of US$156.1 million (£120.3 million), an increase from US$74 million (£57 million) in the same period of 2015.

Revenue increased by US$19.4 milion (£14.95 million) to US$452.6 million (£348.87 million) for the same period.

Throughout the period, the Leiv Eiriksson completed a 15-year survey and scheduled equipment and winterisation upgrades related to its next contract and was mobilised in July to start a contract with Lundin Norway, in Norway.

Earlier in June, the company also reached an agreement with Repsol Sinopec to terminate the contract of the Ocean Rig Mylos operating offshore Brazil.

In April, it had reached an agreement with ENI to settle the dispute regarding the termination of the contract of the Ocean Rig Olympia and the extension of the contract for the Ocean Rig Poseidon.

Ocean Rig currently owns a fleet of six operating rigs with four drilling rigs stacked in Greece and Ocean Rig Mylos expected to be stacked soon.