Alaska Industrial Development and Export Authority to sell holdings in jack-up drilling rig

MarketsAssociated Press

The Alaska Industrial Development and Export Authority announced plans Friday to sell its ownership stake in a Cook Inlet rig, which will be transported to South Africa for offshore exploration, pending final approval.

The authority, set up by the Alaska Legislature to provide financing for businesses that expand the state economy, said Friday it and other owners have been unable to secure a long-term charter for the jack-up drilling rig, the Endeavor-Spirit of Independence. AIDEA officials said there is great interest in having the rig available for Cook Inlet drilling, but the economics of having no long-term commitment prompted the partnership that owns the Endeavor to find another customer.

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"The rig's presence in Alaska promoted significant job creation and economic activity in the Cook Inlet region," said Ted Leonard, executive director of AIDEA, a public corporation of the state.

The rig arrived from Singapore in 2012. Initial plans called for keeping it in Homer for a few days, but it wound up staying more than seven months because of delays and repairs.

The Endeavor is owned by Kenai Offshore Ventures LLC, whose members include AIDEA, Ezion Holdings Ltd. and Ezion subsidiary Teras Investments Pte. Ltd. The partnership plans to purchase AIDEA's stake, AIDEA said.

AIDEA's initial investment was $23.6 million, according to spokesman Karsten Rodvik. The sale price of AIDEA's ownership shares is nearly $25.7 million, a figure that includes AIDEA's 2014 profit distribution, Rodvik said.

AIDEA is clearing nearly $5 million between the sale of its stake and another $4 million from its share of profit between 2012 and 2013, according to Rodvik.

In a separate partnership, AIDEA and an Ezion subsidiary are developing a major oil and gas production and processing facility at the Mustang Field in Alaska's North Slope.