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.