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Transocean Disposing Of Two Semi-Submersibles

May 14, 2020

GSF Development Driller II - U.S. Coast Guard photo by Petty Officer 3rd Class Barry Bena

Offshore drilling contractor Transocean (RIG) is disposing of a pair of floating drilling units, the ultra-deepwater semi-submersible drilling rig GSF Development Driller II, and the midwater semi-sub Transocean 712.

The 2005-built GSF Development Driller has been stacked since 2016.

According to the company's recent fleet status report, the 1983-built Transocean 712 was stacked in April 2020, having worked for Chrysaor. The rig's contract will Chyrsaor will be substituted with either the Paul B. Loyd or the Transocean Leader rig.

"The company expects to dispose of the Transocean 712 in an environmentally responsible way and is evaluating whether to sell the GSF Development Driller II to a third party or to dispose of it in an environmentally responsible way," Transocean said.

"As a result of the company’s decision on May 8, 2020, to dispose of these two rigs, the Company concluded that it expects its second-quarter 2020 results to include an estimated non-cash charge of approximately $420 million. As the Company continues to evaluate the long-term  competitiveness of its fleet, additional rigs may be identified as candidates for disposal," Transocean said.

Transocean's CEO Jeremy Thigpen in April said that the low oil prices and COVID-19 pandemic would "invariably delay the contracting activity that we expected in 2020."

In a conference call in April, he said that the company identified around 40-50 floaters in the market that might never ever get another contract, due to the fact they are old, and require high reactivation fee. 

With these rigs scrapped, the total supply number would go down and potentially provide some support for offshore drilling day rates going forward.

Transocean’s contract backlog was $9.6 billion, the biggest in the offshore drilling space, as of the April 2020 Fleet Status Report.

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