Chopping block for Songa Trym drilling rig?

Offshore drilling contractor Songa Offshore is reportedly thinking of scrapping its semi-submersible rig Songa Trym.

The rig has been stacked without a contract since the late 2015, and according to Sysla.no, if the driller doesn’t find work for the unit soon, the rig’s fate will be sealed.

Namely, there is a Special Periodic Survey coming up in the first quarter of 2018 for the 1976-built unit, and the owner is not going to pay for the costly process for a rig that will remain stacked afterwards, Sysla alleges.

These special periodic surveys are required to maintain classification certificates, which are renewed every five years. These involve yard stays and are for older rigs often combined with rig upgrades.

Songa Trym is a winterised semi-submersible drilling rig built in 1976 by Aker Verdal, Norway and was last upgraded in 2013, which cost the driller more than $260 million.

The duration and cost of special periodic survey depend on many factors including the rig’s general condition, regular maintenance, planning of the survey, area of operation and local requirements, but the costs can be in tens of millions of US dollars. This is one of the reasons the driller postponed the SPS in 2016 for the Songa Delta rig, due to a lack of contract coverage for the rig.

Songa Offshore has seven rigs, four of them modern, and on long term contracts with Statoil in Norway. The remaining three Dee, Delta, and Trym, are veteran units, which have been stacked in Norway, waiting for new work.

According to Sysla, while a candidate for scrapyard, Songa might wait a bit longer with the scrapping of the Songa Trym, as it has loans linked to it, which will come for payment in 2018. Earlier scrapping would mean it would have to pay the debt early, Sysla wrote, citing an analyst.

As for the four operating rigs Songa has under contract with Statoil, they, as per December 31, 2016, had an aggregate contract backlog of approximately $4.4 billion, with options corresponding to approximately $7.7 billion

Offshore Energy Today Staff