The currently unnamed ultra-deepwater new-build drillship is under construction at Samsung Heavy Industries yard in Geoje, South Korea.
In conjunction with the capital lease contract, subsidiaries of Petrobras and Transocean have entered into a 10-year drilling contract covering worldwide operations, with an option by Petrobras to extend the term of the drilling contract by up to an additional 10 years.
The capital lease contract has a 20-year term, after which Transocean will have the right and obligation to acquire the drillship. Total capital costs to be incurred by Petrobras and Mitsui, for the construction of the drillship are estimated to be $750 million, including $65 million of capitalized interest.
The 10-year drilling contract is expected to commence in the third quarter of 2009 following shipyard construction, sea trials, mobilization and customer acceptance. The drilling contract commencement is contingent on vendor performance and other factors.
At least 12 months prior to the expiration of the initial 10-year term, Petrobras may elect to extend the term of the drilling contract by up to an additional 10 years at a mutually agreed operating day rate, which would then apply to the extension period.
Contract revenues over the initial 10-year contract term are estimated to be $1.68 billion, including monthly bonuses, which could be as high as 12% of the day rate revenue each month.
