Shell inks $385M deal with Transocean for upgraded deepwater drilling rig

Ray Tyson

Offshore contract drilling company Transocean has entered into an agreement with Shell for the upgrade of one of Transocean’s Sedco 700-series semi-submersible rigs, Transocean said Nov. 7.

Under the terms of the transaction, which is expected to generate about $350 million in day-rate revenues for Transocean, Shell agreed to use the refurbished rig over a three-year period with an option to extend the contract for up to two years.

Upgrades to the rig, expected to cost around $300 million, are scheduled to begin in early 2006 and conclude in May 2007. The rig will be capable of drilling in waters up to 6,000 feet.

Under the agreement, Shell reserved the right to terminate the contract should the shipyard work on the rig not be completed by Feb. 15, 2008.