More than $301million has been allocated from the State Oil Fund of Azerbaijan (SOFAR) for construction of a new generation drilling rig of DSSTM38M design.
The total cost of the new-build is locally reported to be around $1.1billion, which seems far higher than even current inflated market rates for new tonnage.
It is certainly much higher than the $800million figure quoted last year when the order was originally announced.
Asia-Pac rig and ship builder Keppel FELS was at that time selected as the project contractor, which in June last year signed through its subsidiaries Caspian Rigbuilders and Caspian Shipyard Company (CSC) a contract to build the rig at a new shipyard then about to open at Baku City.
SOFAR owns 90% interest in the company Azerbaijan Rigs, which was specifically set up for the construction of the new semi-submersible.
The remaining 10% of shares are owned by SOCAR (State Oil Company of Azerbaijan).
The rig will, when completed, come under SOCAR control, but be run by Caspian Drilling Company (CDC), which is 92.44% owned by the state oil company.
The DSSTM38M rig is a Keppel FELS design and capable of drilling to 12,000m (40,000ft) and operations in 1,000m water depth. The rig is due for delivery in 2016.
The facility will be deployed for drilling prospective structures and fields in the Azeri sector of the Caspian Sea, such as Umid and Babek, Karabakh and Ashrafi.