First signs of life in tender drilling rig market

Sapura Energy Bhd and its partners, Petronas Carigali Sdn Bhd and Sarawak Shell Bhd, have taken the final investment decision (FID) to develop the gas fields off Sarawak.

KUALA LUMPUR: CIMB Equities Research sees the first signs of life in the tender drilling rig market on news that Sapura Energy’s SKD Esperanza semi tender has won a contract to drill in Malaysian waters.

Riglogix reported the SKD Esperanza had won a contract from EnQuest to drill two wells at the Seligi field in Block PM8 offshore Terengganu. 

It said on Thursday the SKD Esperanza last worked for Sabah Shell for 18 months between August 2016 and February 2018 at a rate of US$105,000 a day, according to Riglogix. 

As Sabah Shell had declined to exercise an option for a further 18 months, the rig has been stacked since March 2018. 

“The contract with EnQuest will see the rig work again from April to June 2018F, at an assumed rate of US$100,000/day, in our estimate,” said CIMB Research.

Sapura Energy did not make an official announcement on this contract award, as it is the company’s usual practice to aggregate several contract awards and announce them together, in order to avoid revealing the value of individual contracts.

“Maintain Add and sum-of-parts based target price of 89 sen, as Sapura Energy is expected to benefit from higher oil prices and progressive improvement in drilling rig demand,” it said.