August 30, 2017 / 1:40 PM / in 4 months

Offshore start-up Borr Drilling aims to expand fleet, keep costs low

OSLO, Aug 30 (Reuters) - Borr Drilling, the Norwegian drilling start-up, which listed on the Oslo exchange on Wednesday, said it aimed to expand its fleet, taking advantage of its low cost base.

The start-up, launched last year and backed by the world’s biggest oil service firm Schlumberger, said it aimed to have the lowest cash break-even costs in the industry and would take advantage of current low prices for rigs.

“We have no debt,” Borr’s Chief Executive Simon Johnson told Reuters after its shares started trading on Oslo’s main market. They were previously listed on the over-the-counter market.

“That might change in the future, depending on the financing needs, but we can control what we pay for assets,” Johnson said.

Offshore drilling companies have come under pressure as oil companies have cut back on spending to cope with lower oil prices. Seadrill, part of Norwegian billionaire John Fredriksen’s business empire, is trying to restructure its debts.

Borr Drilling, which is led by former Seadrill executives, has acquired 17 jack-up rigs since last December and in March won a one-year contract for drilling off Nigeria from Total .

Johnson, who joined Borr in August, said he expected more rig contracts to be announced soon and the fleet expansion would continue, but acquisitions would depend on the price.

Asked if he was looking into possibility of buying rigs from his former employer Seadrill, Johnson said: “I‘m not sure that Mr. Fredriksen is interested in selling Seadrill’s assets to us.”

Borr is also seeking closer cooperation with Schlumberger, which owns 20 percent of the startup.

“We are looking to become an exclusive provider of rigs (for Schlumberger), we are looking to become a captive drilling contractor,” Johnson told Reuters.

This could help to shorten offshore oilfield development times, increasing their competitiveness relative to onshore shale oil, Johnson said.

Borr Drilling shares were trading at 29.8 Norwegian crowns ($3.83) by 1155 GMT. ($1 = 7.7823 Norwegian crowns) (Reporting by Nerijus Adomaitis. Editing by Jane Merriman)

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