December 7, 2022

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Mohne picks up the rig that scrapped Frederiksen's Crisis - E24

Mohne picks up the rig that scrapped Frederiksen’s Crisis – E24

The West Aquila drillship has been stranded at the shipyard since John Frederiksen Northern Drilling canceled delivery last year. And now Frederick W. Mohn is helping buy it out for 2 billion crowns.

Bergen investor Frederick W. Mohn is Trond Mohn’s son.
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Drilling company Transocean, along with Bergen investor Frederik W. Mohns Perestroika, and a fund managed by Lime Rock Management, has started a “joint venture” called Liquila Ventures.

The joint venture company will buy the drillship “Hull 3623” for $200 million, or two billion kroner.

The drillship, previously named West Aquila, has been purchased by South Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME).

It is not known how much perestroika contributed to the purchase. Mohn tells E24 that he “can’t say anything about it.”

– I adhere to Transocean’s guidelines, says the investor.

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Fredriksen has canceled it

West Aquila was first ordered by John Fredriksen’s Seadrill and later bought by another Oslo-listed Fredriksen company, crisis-hit Northern Drilling in 2018.

But after a series of delays and conflicts, it became known last year that the rig company had canceled delivery of the two drilling vessels it had with DSME, the West Aquila and West Libra.

The prospect of drilling vessel delivery and the consequent additional payout in the overburdened rig market will be problematic for Northern Drilling. The combined price of the two drilling vessels was NOK 4.8 billion based on the exchange rate in 2018.

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West Aquila is the so-called seventh generation deepwater drilling vessel.

Expected to be delivered in the third quarter of 2023, Transocean has invested $15 million in Liquila Ventures and has exclusive marketing and operating rights, according to the drilling company.

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Frederick Mohn earned $286 million last year – looking for a drilling rig

Great confidence in the rig after the crisis

Mohn is already an investor in New York-listed drilling company Transocean.

The rig industry has had several tough years, which have caused huge losses for Mohn’s investment firm, but last year he ended up turning a profit during times of mild uptick due to higher oil prices.

When the annual Perestroika results for 2021 were presented this summer, Mohn cited counterfeiting as a sector he believes in.

– The demand for oil continues to increase and the International Energy Agency expects that demand will reach 100.4 million barrels per day in the fourth quarter of 2022, compared to 97.5 million barrels per day in 2021. The rise in oil prices is accompanied by the depletion of global oil reserves after many years of little The investment means oil companies’ budgets will increase dramatically in 2022, Mohne wrote.

He also noted the expectations of consolidation in the rig industry, and that Transocean is “clear that debt repayment is the main priority.”

– Consolidation in the industry continues, and in the summer of 2021, Noble and Maersk Drilling announced their desire to merge. Mohn writes that the consolidation, combined with the fact that 180 buoys have been canceled since the downturn began in 2014, means that pricing power has swung dangerously in favor of offshore rigs through 2021.

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