Saturday, May 15, 2010

BP Plc (LON:BP) Extends Rig Contract with Transocean (NYSE:RIG)

BP Plc (LON:BP) has extended their contract with Transocean Ltd (Swiss:RIGN) (NYSE:RIG), including another rig in the area, although this one will cost less than the prior one.

It's unclear whether that's because of the accident, but the overall rig contracting market has become highly competitive, and prices have been coming down recently because of competition in the industry.

This oil rig, named Discoverer Enterprise, has a contract of about one and a half years on it, through July 2012, at a daily rate of $423,000, down from the previous $523,000 now on it. The contract starts in February 2011.

I like this in that the two companies are going forward and not just focusing on the tragic accident of the Deepwater Horizon oil rig which claimed 11 lives and continues to spew oil into the Gulf of Mexico region.

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