New drilling contract to Deepsea Atlantic

May 25, 2018 11:12 CEST | Last modified May 25, 2018 11:17 CEST
Photo from the contract signing
Simen Lieungh, CEO Odfjell Drilling, and Geir Tungesvik, senior vice president for Drilling & Well, with a model of the Deepsea Atlantic drilling rig. (Photo: Kjetil Eide)

Equinor has awarded Odfjell a contract for drilling two times three production wells for the Fram and Askeladd licences by using the Deepsea Atlantic rig. Odfjell has also been awarded a master framework agreement (MFA).

Equinor has signed a framework agreement with Odfjell with terms that will be used for future rig contracts with Odfjell on the Norwegian continental shelf. At the same time, the first rig contract has been signed for Deepsea Atlantic under this contract format.

“We have reached a long-term agreement with standard terms that will ensure more efficient procurement processes for future assignments with Odfjell. In addition, we have secured an efficient rig, Deepsea Atlantic, for a fixed period to start with, before we move to continuing options that can be exercised across Equinor-operated licences. The options will have market index prices ensuring that we have competitive conditions in the market at all times,” says Pål Eitrheim, senior vice president for Procurements.

The established work programme is scheduled to start in January 2019. Deepsea Atlantic is a semi-submersible 6th generation mobile drilling rig.

The value of the well-based contract is estimated at USD 150-200 million for six wells. In addition to drilling services, the rig owner is responsible for casing running, slop treatment and cuttings handling, remote control vehicle (ROV) and fuel.

The Deepsea Atlantic drilling rig
The Deepsea Atlantic drilling rig.
(Photo: Odfjell Drilling)

“We are very pleased to secure a rig that has recently completed an efficient campaign for us on the Johan Sverdrup field. We have cooperated with this contractor for a long time with good results. We expect the contract to provide up to 18 months of work before we move to the framework agreement, aiming to find new assignments for the rig on a continuous basis. This is a performance-based contract aiming to promote safe and efficient operations, and it includes an incentive to reduce CO2 emissions,” says Geir Tungesvik, senior vice president for Drilling & Well.

Currently on contract with Equinor and its licence partners, Deepsea Atlantic will complete a drilling programme for the Visund and Utgard licences before it undergoes 10-year-classification.

First, the rig will drill three so-called dual multilateral wells on the Fram field. Each of these wells will have two branches radiating from the main wellbore. Then the rig will proceed to Askeladd to drill three production wells.

The operations will be supported by logistics bases at Mongstad and Hammerfest respectively.

The contract with Deepsea Atlantic is a confirmation of the letter of intent announced by Odfjell Drilling on 16 April.

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