Rowan rigs leaving U.S. Gulf for Mideast-analysts

Fri Jul 2, 2010 3:18pm EDT

Related Topics

* Aramco seen as likely customer for two Rowan rigs

* Would join 9 other Rowan rigs in Middle East

* Rowan shares up nearly 5 pct despite sector decline

SAN FRANCISCO, July 2 (Reuters) - Two shallow-water rigs owned by Rowan Cos Inc (RDC.N) will be departing the U.S. Gulf of Mexico later this year, and analysts said on Friday they expect them to end up in the Middle East.

There has been steady speculation about rigs leaving the region due to increased U.S. regulation following the BP Plc (BP.L) deepwater well blowout; but Rowan said its two rigs would be leaving to meet demand elsewhere. [ID:nN01142807]

On a conference call on Thursday, Rowan executives declined to comment on where the rigs would go, as negotiations were still under way, but said they would be on three-year contracts with one client. A spokeswoman for the Houston-based company declined to comment further.

Simmons & Co analysts said they believe the rigs -- the Bob Palmer and Ralph Coffman -- are probably going to Saudi Aramco, on rates somewhere in the range of $175,000 per day.

Rowan already has nine rigs in the Middle East, including three older and less-capable jackups now awaiting work, three working for Aramco, two with AP Moeller Maersk A/S (MAERSKb.CO) and one with BASF AG BASF.DE subsidiary Wintershall. The three rigs already working for Aramco earn $180,000-$190,000 per day.

The Bob Palmer is contracted at $110,000 per day with Apache Corp (APA.N) through September, while McMoRan Exploration Co MMR.N is paying $180,000 per day through October for the Ralph Coffman.

Analysts at Tudor Pickering Holt said in a note on Friday that they believe the two Rowan rigs are also headed to Saudi Arabia, for deep natural gas work.

Shares of Rowan -- which also said on Thursday Apache had rescinded its force majeure claim on another Gulf of Mexico rig -- were 4.8 percent higher on Friday despite a decline in the Philadelphia Stock Exchange oil service index. .OSX (Reporting by Braden Reddall, editing by Gerald E. McCormick)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.