In connection with the newbuild orders, the company has also decided to split off its drilling activities into a separate company, Sevan Drilling, to be listed on the Oslo stock exchange.

The new rigs will be based on the Sevan 650 design and built at Cosco’s Nantong shipyard, in China’s Jiangsu province.

Cosco said the rigs would cost about $525 million each, adding under the letter of intent Sevan has the option to order an additional two rigs at the same price.

The two rigs are expected be delivered to Sevan during the fourth quarter of 2013 and the second quarter of 2014, respectively.

The deal is still subject to the board approval of both companies with formal agreements expected to be signed at a later date.

Cosco delivered Sevan’s first drilling rig, and the world’s first cylindrical rig, the Sevan Driller, last summer.

The Norwegian rig player is now creating a new dedicated drilling outfit to further develop its ultra-deepwater business.

The company aims to raise $350 million through an initial public offering, scheduled for next month, and will retain a 20% stake in Sevan Drilling.

Sevan Marine chief executive Jan Erik Tveteraas said the company sees “increasing and healthy demand” for ultra-deepwater rigs going forward.

“We believe that a separate listing will increase the visibility of the underlying values of the business to the benefit of our shareholders. Independence will act as a catalyst for further growth for both the FPSO and the drilling business,” he added.

Tveteraas will take on the new role as chief executive at Sevan Drilling, with his successor at the parent company now being lined up.

Published:  25 March 2011 09:39 GMT   |  Last updated:  25 March 2011 13:34 GMT