Bangalore: Oil drilling rig owner SeaDragon Offshore Ltd is looking for other buyers after Great Offshore Ltd, India’s biggest integrated offshore service provider, said it was only keen on buying one of its two rigs under construction and not the company.
“SeaDragon Offshore has hired Lehman Brothers to look at all options, including whether there are other buyers for a controlling stake in the company,” Bobby Morse, spokesperson for Cayman Islands-based SeaDragon, told Mint from London.
The US-based investment bank will examine all options, including the revised offer from Great Offshore. “The options to be suggested by Lehman may or may not lead to the entire sale of SeaDragon,” Morse added.
In demand: An Oil and Natural Gas Corp. oil drilling facility at Bombay High, off the coast of Mumbai. An acute shortage of deep-water oil drilling rigs has delayed the plans of India’s oil and gas explorers. (Photo: Bloomberg)
Great Offshore announced on 7 June it was scaling down its earlier plan to buy a controlling stake in an overseas company that was building two ultra-deep water oil drilling rigs.
“The economics of the project has undergone a significant change from what was originally envisaged. Hence, the board of directors of the company has decided to propose to the stakeholders of the overseas company to acquire one of the two rigs under construction by the overseas company,” Great Offshore had said in a statement.
It would not name the overseas company or say which of the two rigs it planned to buy. “We have submitted our revised offer and are waiting for a response from the overseas company. It will take time,” a spokesperson for Great Offshore said.
Industry experts told Mint the overseas company is SeaDragon Offshore.
On 15 January, Great Offshore said it had made an offer to buy a controlling stake in an overseas company, which would own two ultra-deep water drilling rigs that were being constructed at an estimated cost of $1.4 billion (about Rs6,000 crore today).
The following day, on 16 January, SeaDragon Offshore said it had “received an outline offer, which is subject to certain conditions including results of a due diligence exercise, for a new equity investment of over $250 million.”
The company said it expected shareholders to be offered about $8 per share if the investment was made.
“Acceptance of the offer by all, or any, of the existing shareholders is not a condition of the subscription by the offeror for new equity,” SeaDragon added, but didn’t name the company that made the offer.
The first rig, due for delivery in the fourth quarter of 2009, has been rented out to Petroleos Mexicanos, or Pemex, the world’s third-biggest crude oil producer, on a five-year, $958 million deal.
The second rig is slated for delivery in September 2010.
Great Offshore currently owns and operates two rigs and a fleet of 38 offshore ships of various types. It is building one more offshore vessel and an oil drilling rig.
An acute shortage of deep-water oil drilling rigs has delayed the plans of India’s oil and gas explorers such as Oil and Natural Gas Corp., Reliance Industries Ltd and Gujarat State Petroleum Corp.
“Day rates for rigs are climbing dramatically and the world needs more rigs,” said Harald Saetvedt, corporate finance director of Norway’s Pareto Securities AS, in a recent update on energy market.
A jack-up rig currently fetches day rates ranging from $150,000 to more than $200,000, depending on the tenure of the contract and the region where it will be deployed.