Oil & Gas

Italian contractor Saipem settles deal for new drillship

Saipem (MI: SPM) has strengthened its offshore drilling fleet with the addition of a new vessel.

The Italian contractor has exercised its purchase option for the seventh-generation Santorini drillship.

It has already been operating within Saipem’s fleet, after a long-term charter agreement was struck with Samsung Heavy Industries in 2021.

Saipem will pay $230 million to permanently secure the vessel, to be paid by the end of 2022.

Construction work on the Santorini wrapped up in 2021.

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It is a “technologically advanced vessel”, kitted out with two seven-cavity blow out preventers (BOP) –  the highest standard for ultra-deepwater drillships – state-of-the-art operations automation systems, and the latest solutions to optimise environmental impact.

The vessel is currently in operation in the US Gulf of Mexico where it is executing a contract with supermajor Eni, expiring in the third quarter of 2023.

It is the latest collaboration with Samsung Heavy Industries, which has also supplied the Saipem 10000 and Saipem 12000.

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The investment decision is based on an expected return on investment of over 15%, with a payback period of five years, estimated on the basis of the existing contract and the Santorini’s commercial prospects.

The backlog of Saipem’s offshore drilling activity to date amounts to more than €1.5 billion, the highest value in the last six years.

Existing contracts (including optional periods) result in a fleet commitment about 80% for 2023 and about 60% for 2024.

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