Friday 18 August 2017

Statoil is reportedly in the market for three additional rigs as it seeks to take advantage of lower dayrates, including two units for drilling work in the Barents Sea off Norway.

The state-controlled operator has initiated a tender for two frame agreements for a pair of rigs capable of working in both deep and shallow waters in the Arctic region, Norwegian news site Petro.no reported, citing a Statoil spokesman.

The work will entail exploration wells, as well as drilling near existing fields and for upcoming projects, though the workscope and licences to be drilled have not yet been finalised, according to the spokesman.

Statoil will be looking to drill production wells under its proposed development of the Johan Castberg field in the region on which a final investment decision is due later this year.

The spokesman said projected start-up for the two frame agreements is between 1 October 2018 and 1 March 2019, and between 1 April 2018 and 1 March 2019.

In addition, Statoil is hunting for a rig for drilling of 22 wells under its Snorre Expansion project at the North Sea field, with estimated start-up in the third quarter of 2019 and a duration of between three and four years.

The latter contract is contingent on a final investment decision and submission of a field development plan on the project that is due in December this year, with an award likely to be made around the same time.

There is likely to be keen competition for the contracts, given that 15 floating rigs are already laid up off Norway with four more units due to come off contract later this year.

However, only a handful of these rigs will be compatible with harsh-environment requirements for drilling in the Barents, including Ocean Rig’s Leiv Eiriksson and Transocean Spitsbergen.

Statoil has previously suspended or cancelled rig contracts with high dayrates to streamline its drilling portfolio as part of a cost-cutting exercise but is now re-entering the market as dayrates have plummeted due to a slump in demand and overcapacity.

It is currently drilling the controversial Korpfjell wildcat in the Barents using newbuild semi-submersible Songa Enabler, which is working under a long-term charter at a dayrate of $449,000 - around double the rates for other comparable units.