Equinor awards Odfjell new drilling contract to Deepsea Atlantic

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 the Deepsea Atlantic semi 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,” Pål Eitrheim, Senior Vice President for Procurements, said. “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 licenses. The options will have market index prices ensuring that we have competitive conditions in the market at all times.”

The established work program is scheduled to start in January 2019. Deepsea Atlantic is a sixth-generation semisubmersible.

The value of the well-based contract is estimated at $150 to $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 and fuel.

“We are very pleased to secure a rig that has recently completed an efficient campaign for us on the Johan Sverdrup field,” Geir Tungesvik, Senior Vice President for Drilling and Well, said. “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.”

Currently on contract with Equinor and its license partners, the Deepsea Atlantic will complete a drilling program for the Visund and Utgard licenses 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.