FAR East Levingston (FELS) has found a buyer for a rig rejected by AP Moller of Denmark, putting to rest months of market speculation on the fate of the vessel. FELS said in a statement that it has signed a letter of intent to sell the harsh-environment jack-up rig, FELS Hull B222, to Norwegian drilling contractor, Smedvig. At first, the Norwegian firm will own 25 per cent of the vessel, valued about US$150 million. Under the terms of the letter of intent, Smedvig is obliged to increase its ownership to 100 per cent later. The FELS statement did not specify the time frame. FELS and Smedvig have agreed that the letter of intent would be confirmed subject to the approval of their directors before the end of next month. Smedvig, which owns and operates 10 drilling and eight tender units, will be responsible for the rig's operation, management and market. FELS has undertaken to help market the vessel to oil companies. In a company's statement, FELS managing director Choo Chiau-beng said: ''There is a synergy between FELS, a rig builder, and Smedvig, a rig operator, and we foresee that we will be expanding our co-operation to further our common interest in the offshoreindustry.'' Smedvig, based at Stavenger, Norway, offers engineering services to the petroleum industry. The company, which holds contracts on 17 fixed installations, also operates companies in the UK and Asia. Commenting on the rig, Smedvig managing director Ole Melberg said: ''With its advanced capability, it is ideal for frontier operations such as in the Norwegian sector of the North Sea, which currently has a level of activity which offers good employment opportunities for such a sophisticated unit.'' FELS Hull B222 is one of the largest rigs in the world and can work in tough conditions at water depths of up to 120 metres. A sister rig, also built by FELS, has already found employment. AP Moller secured a charter contract for that vessel more than a month ago. The jack-up will be leased to Elf Norway, a member of the French oil group Elf Aquitaine. The charter is for 10 months a $125,000 a day.