Equinor hires Odfjell rig for three more wells

Norwegian oil major Equinor has chosen to use Odfjell Drilling’s Deepsea Atlantic semi-submersible drilling rig offshore Norway.

Odfjell Drilling said on Tuesday that the
Deepsea Atlantic would work on Equinor’s three offshore wells.

According to the company, the wells were
exercised under the continued optionality mechanism in the contract entered
into between the two companies back in May 2018. This is also a part of an overall
master frame agreement.

The rig will start drilling the wells
under the new agreement following the completion of the current scope estimated
to be in the fourth quarter of 2020.

Odfjell added that the commercial
terms were materially the same as for the recently announced Johan Sverdrup
Phase 2 letter of intent that would start in the first quarter of 2022.

As for the letter of intent, Equinor hired the Deepsea Atlantic rig to drill 12 wells during phase 2 of the Johan Sverdrup field development in Norway, following its work on phase 1.

The value of
the fixed part of the agreement is estimated at around $150 million. The costs
of integrated services, maintenance and options for drilling five extra wells
are not included in the estimated value. The total contract value will depend
on the efficiency of the well deliveries.

The Johan
Sverdrup licence partners are Equinor (operator), Lundin, Petoro, Aker BP and
Total.

Johan
Sverdrup phase 2 includes the construction of a subsea production system,
reconstruction of the existing riser platform and a new processing platform,
which will also accommodate a converter unit receiving power from shore.

The phase 2
development will increase the field production capacity from 470,000 to 690,000
barrels per day on plateau.

The
break-even price will be below $20 per barrel, making Johan Sverdrup a highly
profitable field with a very low CO2 footprint.

To remind, Equinor last week won regulatory approval to use the Deepsea Atlantic rig on the Gullfaks field in the North Sea, offshore Norway.

The Deepsea
Atlantic, which will be used for the drilling, is a sixth-generation deepwater
and harsh environment semi-submersible. This unit, along with sister rigs
Deepsea Stavanger and Deepsea Aberdeen, is a dual derrick, dynamic-positioned
unit of enhanced GVA 7500 design.