Bangkok--23 Nov--Francom Asia
TTA Offshore Services Subsidiary Mermaid Continues Strong Turnaround with Significant Contracts
- Mermaid JV awarded US$ 530 million IRM contract by Saudi Aramco
- Jack-up drilling unit Asia Offshore Drilling wins inaugural contract worth US$ 236.5 million
- Middle East subsidiary Subtech secures US$ 25 million offshore services deal
Thoresen Thai Agencies Public Company Limited (“TTA”) announced today three key deals for its 57.14% owned subsidiary, Mermaid Maritime Public Company Limited (“Mermaid”). Mermaid is a Singapore-listed leading provider of subsea and drilling services for the offshore oil and gas industry.
In a deal concluded last month, a new joint venture between Mermaid and Zamil Offshore Services Company (“Zamil”), the largest offshore and marine services provider in the Middle East, was awarded a five-year Inspection, Repair, and Maintenance (“IRM”) contract, worth at least US$ 530 million over five years (with a two year extension option) by Saudi Arabian Oil Company (“Saudi Aramco”), the world’s largest oil and gas company. Mermaid’s share of revenue from the IRM contract is expected to be in the range of 60% to 70% over five years.
The contract scope of work calls for full diving services, including air/mixed gas diving, saturation diving, ROV intervention, inspection, and routine offshore field repair and maintenance. Saudi Aramco has contracted for the deployment of four offshore support vessels and one dedicated saturation dive support vessel. Mermaid will relocate M.V. Mermaid Asiana to Saudi Arabia to service the contract. In addition, Mermaid and its Middle East-based subsidiary, Subtech Ltd., will provide up to 110 highly skilled divers, three remotely operated vehicles, and scuba replacement packages.
Additionally in October, Mermaid’s 33.75% owned affiliate, Asia Offshore Drilling Ltd (“AOD”), announced its inaugural drilling contract for the first of its three high specification jack-up rigs, AOR-1. The deal is worth US$ 197 million plus a US$ 39.5 million mobilisation fee over three years, with an additional one-year option.
The drilling deployment will be managed by Seadrill Limited ("Seadrill") on behalf of AOD. AOR-1 is currently under construction with Keppel FELS in Singapore and is scheduled arrive in the Middle East to begin operations by June 2013.
Earlier this month, Mermaid's Qatar-based subsidiary Subtech, won a five-year US$ 25 million contract from a leading international upstream oil and gas operator. Carried out by Mermaid’s specialised DP barge, DPB Mermaid Siam, the scope of services will include full service offshore field maintenance, remedial and call-off work.
“In particular, the US$ 530 million and the US$ 25 million deals come as a result of the hard work we have put towards securing longer term contracts and expanding our subsea services business beyond South East Asia. The Middle East is a high growth region, and given its weather conditions, diving teams can work year-round, as compared to South East Asia, which has a low season.” commented M.L. Chandchutha Chandratat, TTA’s President & CEO. “For AOD, we are thrilled to see the company grow from concept to fruition in two short years and are very pleased to see AOR-1 employed at strong day rates in the Middle East by a leading oil and gas major.”
“For Mermaid and AOD, these three deals combined enable a stream of stable revenues, profits, and cash flows over the medium term,” said Mr. Chalermchai Mahagitsiri, Mermaid’s acting CEO. “The oil and gas services sector continues to heat up throughout Asia and the Middle East, and Mermaid has made outstanding strides and is well positioned to capture an expanding share of this exciting growth market. Going forward, we’ll look for continued growth from Mermaid’s subsea services segment while also exploring opportunities to expand our drilling segment where globally, modern tender rigs are reporting utilisation rates of up to 95% amidst a supply shortage that will likely keep this rate steady for at least the medium term.
“In particular, Mermaid’s investment in AOD was perfectly timed, and we are now preparing to reap the rewards, with our new-build assets arriving at a time when demand for modern, high specification jack-up rigs is high and supply limited,” continued Mr. Mahagitsiri. “As a result, day rates for new jack-up rigs have climbed and reached a new high of US$ 180,000/day with this contract, and with continued strong outlook for oil and gas exploration, we see this trend holding for at least the next few years.”
Mr. Paul Whiley, Subtech’s Managing Director added, “Subtech has consistently managed on-going and hugely successful expansion programmes through the Middle East and West Africa over the past few years. We are continuing to harness our current momentum as a base from which to expand our business development efforts within our core abilities in the oil rich regions of North Africa and down into the Bight of Biafra.”
Following a period of realignment in 2011, Mermaid’s turnaround culminated in a 20.5% and 194.2% third quarter (that ended on 30 June 2012) year-on-year growth of revenues and profits, respectively. With the business outlook remaining strong for the oil and gas industry, Mermaid is well positioned to continue its bullish momentum with a profitable fiscal year 2012, and with significant increases in revenues and profits from 2013 onwards.