October 25, 2011 / 9:15 AM / 7 years ago

Maersk's drilling unit signs $780 million deal with BP

COPENHAGEN (Reuters) - Maersk Drilling, a unit of Danish shipping and oil group A.P. Moller-Maersk (MAERSKb.CO), has struck a four-year $780 million deal with BP (BP.L) for a deepwater rig, and aims to increase its fleet by 6-8 rigs within five years.

London-based BP would pay about $500,000 per day for the ultra deepwater semi-submersible “Maersk Discoverer,” a price that indicates good demand in the market, Maersk Drilling’s chief executive Claus Hemmingsen told Reuters.

“We are close to $500,000 per day and we are pleased about that since this is a long-term contract,” Hemmingsen said.

“The deepwater market has actually been at a stable level since the crisis started in 2008. Rates have not fallen below $400,000 per day. When rates exceed $450,000 per day, it is a signal that there is good activity and good demand,” Hemmingsen said.

The contract with BP for the “Maersk Discoverer” was for work initially offshore Egypt, and the maximum contract value was about $780 million, including mobilization fees, the company said in a statement.

“We have ordered another six rigs ... and the expectation is that we will order six to eight more during the next five years, in addition to the ones already ordered,” Hemmingsen said.

The six rigs already ordered will be delivered in 2013 and 2014, while the six to eight rigs to be ordered would be delivered in 2015 and 2016, he said.

The four-year contract includes an option for a further year, and is expected to commence in the second quarter of 2012, it said.

Shares in A.P. Moller-Maersk initially traded down but had turned positive to trade up 0.9 percent at 37,180 crowns by 0854 GMT (4:54 a.m. EDT), outperforming a 0.5 percent rise in the Copenhagen stock exchange’s benchmark index .OMXC20.

Reporting by Mette Fraende and Ole Mikkelsen; Editing by Will Waterman

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