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Transocean buys share in Deepwater Pathfinder JV Deal with ConocoPhillips ends last of two ground-breaking joint ventures Petroleum News
ConocoPhillips and big offshore drilling contractor Transocean have ended the last of two ground-breaking joint ventures, with Transocean acquiring ConocoPhillips’ 50 percent stake in the drillship Deepwater Pathfinder, Transocean said Dec. 31.
Transocean said last May it would be acquiring ConocoPhillips’ 40 percent interest in their jointly owned drillship Deepwater Frontier, commissioned in 1999 at a cost of about $270 million. The company took over ConocoPhillips stake for $4.5 million in cash and assumed $80 million in debt, valuing the ship at $210 million on Transocean’s books.
Neither Transocean nor ConocoPhillips provided financial details for their deal involving the Pathfinder, the first of the two drillships to be constructed after that joint venture with Reading & Bates, called Deepwater Drilling LLC, was announced in 1996. Transocean ended up with the assets of Reading & Bates following a series of mergers, including the 50-50 Deepwater Drilling joint venture with Conoco. Pathfinder constructed for Gulf exploration program Pathfinder was initially constructed as a new generation, “ultra-deepwater” drillship to conduct a five-year, $400-million Gulf of Mexico exploration program to evaluate 60 Conoco blocks, located in water depths ranging from 2,000 to 9,000 feet. Reading & Bates provided drilling services to the joint venture. Conoco originally had a separate contract with the joint-venture company for exclusive use of the ship during the first five years, with renewal options every five years up to 15 years. Analysts back then considered the Deepwater Drilling joint venture to be a good move for both parties, allowing them to spread the financial risk of what amounted to a new technology, while giving Conoco some control over the drillship for other deepwater ventures.
Samsung Heavy Industries of Korea was commissioned to build the 721-foot, double-hulled Pathfinder for delivery in 1998. Samsung had built five double-hulled crude tankers prior to Pathfinder. Construction costs were estimated at $200 million.
Deepwater Drilling is now a wholly owned subsidiary of Transocean and will be consolidated in its financial statements, the company said.
Transocean is the world’s largest offshore drilling contractor with more than 160 fully or partially owned and managed mobile offshore drilling units, inland drilling barges and other assets used in the support of offshore drilling activities worldwide. The company owns 13 fifth-generation semi-submersibles and drillships, 15 other deepwater semi-submersibles and drillships, 31 mid-water semi-submersibles and drillships and 50 jackup drilling rigs.
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