LeTourneau gets go-ahead to restart rig work
Published 12:00 am Saturday, June 27, 2009
In its third piece of good economic news in recent months, LeTourneau Technologies has received the green light to resume construction of a third 240C class jackup rig, dubbed the Joe Douglas, at its Warren County yard south of Vicksburg.
LeTourneau Human Resource Manager Dan Flournoy said the work will not expand the number of employees locally.
“Under the current construction schedule, we don’t foresee any impact on employment in Vicksburg,” Flournoy said.
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Rowan Companies, the Houston-based parent company of LeTourneau, had halted construction of the rig in January, but said Friday that economic improvements have put the project back on track.
“Earlier this year, we halted construction on this rig due to concerns over the turmoil in the credit markets and the downturn in jackup drilling markets,” said Rowan president and CEO Matt Ralls in a released statement. “Based on improvements in the credit markets and our confidence in our liquidity outlook through 2010, we have elected to resume construction.”
The revised plans call for delivery of the Joe Douglas rig in the third quarter of 2011. It is expected to cost $150 million, bumping capital expenditures for the company to about $550 million in 2009 and to $300 million to $325 million in 2010.
“We believe that this very capable, high-specification rig will generate an attractive return on capital,” Ralls said, “and be met with widespread customer acceptance.”
Earlier this month, the Vicksburg yard was awarded a $40 million contract with PetroVietnam Shipyard to provide LeTourneau-designed rig kit equipment for a new Super 116-E jack-up with 377 feet of leg for Vietnam’s state-owned oil and gas exploration company at its Vung Tau City facility. The key rig equipment involves the leg components, elevating system, controls, spud can materials, cantilever skidding system and hold-down structures.
In March, Rowan announced a pair of contracts to provide similar equipment for two of the Super 116E’s with Consorcio Rio Paraguacu for Brazil-based energy company Petrobras and an agreement with Mexico’s state-owned oil company, Petroleos Mexicanos, for work on the locally-built Gorilla IV rig. That rig is expected to arrive in Mexico by month’s end.
With about 600 employees, LeTourneau is one of Vicksburg’s largest employers. The struggling economy was blamed for the lay off of 50 employees and reduced hours for other employees in January, and in December, contract workers making up about one third of the total work force were laid off.
Rowan Companies began construction of the initial 240C class rig, Rowan Mississippi, in 2007. Completion of the second, Ralph Coffman, is scheduled for early 2010.
The Joe Douglas, like the other two in its class, will have 2.5 million pounds of hookload, an 80-feet cantilever reach and 491 feet of leg length.
The 240C class of jackup rigs is capable of drilling in 400 feet of water, and is designed to be an upgrade of the original 116-C class, which Rowan called “the workhorse” of the global drilling industry since being introduced in the 1970s.
Contact Pamela Hitchins at firstname.lastname@example.org