Exxon Mobil Corp could be on the verge of signing a contract for a Transocean rig capable of drilling in Arctic waters, it has been revealed.

The rig is expected to cost up to $1bn to build, according to a source familiar with the rig, reports Reuters.

According to the source, the new rig could be deployed in places such as Greenland, Iceland or offshore Alaska, and would command a rate in the range of a record $650,000 per day.

Executives and analysts say Arctic offshore drilling will become more attractive for big oil companies as pricier crude supports more expensive extraction.

A final decision on the new Transocean drillship had been expected last month, but Exxon was busy working out its $30bn deal to buy XTO Energy Inc, according to the Reuters report.