Transocean are scrapping four deep-sea rigs

Transocean are scrapping four deep-sea rigs

18-06-2018 10:00:00

Transocean plans to send more of its drilling rigs for scrapping in light of the continued weak market. According to the company, the ultra deep-sea rigs Deepwater Discovery, Deepwater Frontier and Deepwater Millennium as well as Songa Trym will be scrapped in an environmentally responsible manner.

"Transocean acknowledges that drilling ships built 18-19 years ago can not cope with the competition. The largest depreciations are the three drill vessels that were built in 1999 and 2000, while the Songa rig is much older and has long been a probable candidate for scrapping minimal economic impact, "says Bernstein analyst, Colin Davies.

The US listed company expects, as a result of scrapping the rigs, that the result for the second quarter of 2018 earnings will include an estimated non-cash impairment of approximately 520 million dollars. Transocean continues to evaluate the fleet's long-term competitiveness. This may mean that additional rigs are identified as candidates for retirement.

The four rigs now being scrapped have not been used since 2015 and 2016 and would have to face significant re-activation costs. Even rigs built in the early stages (2006-2012) of the current new building cycle are in serious lack of work. 22 of these rigs are still not much in use, according to Colin Davies.

Source: TradeWinds

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