Keppel AmFELS to build and upgrade Diamond Offshore semi

Keppel AmFELS LLC, Brownsville, Texas, has secured a contract from Diamond Offshore to construct and upgrade a moored semisubmersible offshore drilling rig with delivery scheduled for third quarter 2013.

The estimated shipyard contract price is approximately $150 million. However, Diamond Offshore says total cost, including commissioning, spares and project management, but excluding capitalized interest, is expected to be approximately $300 million

To be named Ocean Onyx, the rig will be constructed from the existing hull from a Diamond Offshore cold stacked unit that previously operated as the Ocean Voyager.

Keppel AmFELS' scope of work on the Ocean Onyx includes the reconstruction of the rig, installation of advanced equipment such as a modern drilling package, and installation of sponsons to the pontoons to enhance the stability of the rig in deepwater. The rig will be designed to operate in water depths of up to 6,000 feet and will have a variable deck load of 5,000 long tonnes, a five-ram blowout preventer, and quarters capacity for 140 personnel.

"We think significant opportunity remains for new deepwater units," said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. "No new capacity targeting the standard midwater and deepwater markets is currently under construction, and this rig should be ideally suited to meet emerging demand in this segment. When added to our three ultra-deepwater drillships under construction, this unit will continue the process of renewing Diamond's fleet."

Mr. Dickerson said that utilizing an existing hull from a cold stacked unit "should allow the Ocean Onyx to be built and placed into service in approximately half the time and at half the cost of current newbuilds."

Mr. Dickerson said, "We have worked with Keppel for more than a decade, and our rigs have consistently been delivered on time and within budget, whether in the U.S. or Singapore. With Keppel's track record as a leading offshore yard, we are confident that this project will also be a success."

Keppel O&M has previously built four similar semisubmersible rigs for Diamond Offshore: the Ocean Baroness, Ocean Rover, Ocean Endeavour and Ocean Monarch.

Mr. Tan Geok Seng, President of Keppel AmFELS, said, "We are pleased to be able to embark on another major rig project for Diamond Offshore, who has worked with Keppel on more than 20 projects since 1996. Diamond's rigs are sent regularly to our yards around the world for maintenance, repair and upgrade, and Keppel AmFELS has proven to be their choice yard in the U.S. Gulf of Mexico. Having built a long-term partnership with Diamond, we understand the company's needs and are confident of delivering another high quality rig to their satisfaction."

Keppel AmFELS is a subsidiary of Keppel O&M, a wholly-owned company of Keppel Corporation Limited.

January 9, 2010