Ocean Rig awarded extensions for ultra-deepwater drillships in Brazil

Petrobras has awarded Ocean Rig extensions for two ultra-deepwater drillships, the Ocean Rig Corcovado and the Ocean Rig Mykonos, for drilling offshore Brazil. The contract extensions are subject to partner approvals. The term of each extension is for 1,095 days, with a total combined revenue backlog of more than $1.1 billion, excluding reimbursement by Petrobras for contract-related equipment upgrades. The new contracts will commence in direct continuation from the end of the current agreements with Petrobras, in Q1 and Q2 of 2015.

Ocean Rig also signed an amendment with TOTAL E&P Angola to extend the date by which TOTAL should exercise the option to extend the term of the contract for the Ocean Rig Olympia drillship for two additional one-year periods. The first option is now exercisable until 27 February 2015, and the second option exercisable within one year after the date of exercise of the first option.

“Petrobras’ contract extensions and TOTAL’s LOI extension for the Olympia is a positive sign for the future prospects of the UDW market,” George Economou, the Ocean Rig’s Chairman and CEO, said. “We see various requirements from clients for additional drilling programs in Angola. We believe that, as oil companies are finalizing their budgets for 2015, we will get a much clearer picture of the long-term supply and demand balance, which may be tighter than market expectations.