Samsung Heavy Wins First Drill-Ship Order in 2 Years

Samsung Heavy Industries Co., the world’s biggest drill-ship maker, won its first contract for such vessels in two years as oil companies revive exploration plans following the BP Plc spill in April. The $1.08 billion contract from Seadrill Ltd. covers two vessels and includes options for two more, Seoul-based Samsung Heavy said today in an e-mailed statement. The ships, which will be deployed in the Gulf of Mexico and West Africa, will be delivered by May 2013, it said.
“This order could be a signal that investments in offshore projects may be revived after the Gulf of Mexico oil spill,” Samsung Heavy said in the statement. The company has won 61 percent of the 51 drill ships ordered worldwide since 2000, it said.
Demand for drill ships and oil rigs has begun to recover since the U.S. last month lifted a ban on deep-water drilling imposed following the BP spill. Oil prices are also at the highest in more than two years as the global economy rebounds from last year’s recession.
The vessels, each as long as two soccer fields, will be able to drill 11,000 meters (36,000 feet) below sea level, the shipyard said. The order helped increase the company’s backlog to $39.9 billion, enough to keep it busy for almost three years. The shipyard has won orders worth $9.1 billion this year, exceeding its earlier target of $8 billion.
Samsung Heavy advanced as much as 1.8 percent to 33,750 won and traded at 33,400 won as of 10:36 a.m. in Seoul. The stock has climbed 38 percent this year, compared with a 17 percent rise for South Korea’s benchmark Kospi index.
Crude oil for December delivery climbed as much as 34 cents, or 0.4 percent, to $88.15 a barrel in electronic trading on the New York Mercantile Exchange, and was at $88.13 at 12:39 p.m. Sydney time. Yesterday, it surged $1.09 to $87.81, the highest settlement since Oct. 8, 2008.