New five-year deal for Odfjell rig with Aker BP

New five-year deal for Odfjell rig with Aker BP

Norwegian oil and gas player Aker BP has added a significant order backlog to an Odfjell Drilling-owned rig with a five-year firm contract award in Norway.

Deepsea Stavanger rig; Source: Odfjell Drilling

Odfjell Drilling revealed on Wednesday that its Deepsea Stavanger semi-submersible rig was awarded a five-year firm contract with Aker BP for drilling programmes scheduled to start in early 2025.

Kjetil Gjersdal, CEO of Odfjell Drilling, remarked: “This long-term contract confirms our strong relationship with Aker BP. I am confident that Deepsea Stavanger is the right rig to deliver on the high environmental and operational ambitions on the major field development projects Aker BP is planning to execute.”

The offshore rig owner outlines that day rates for the contract will be market-based, within a pre-agreed range with day rate to be set by two brokers nine months prior to each calendar year.

Furthermore, the company explains that the base contract value is in the range of $620 million to $730 million, where the ceiling of the day rate range will be adjusted based on an inflation adjustment formula starting from June 2023.

Moreover, Odfjell Drilling points out that in addition to the market-based day rates, Aker BP will pay performance and fuel savings incentive bonuses. This contract award is subject to license partner approval and Norwegian governmental approvals of the Plan for Development and Operation (PDO) of planned projects, according to the rig owner.

The 2010-built Deepsea Stavanger is a sixth-generation deepwater and harsh environment semi-submersible of an enhanced GVA 7500 design. It can accommodate 157 people.

This rig is currently working for Equinor thanks to a deal inked back in May 2021, which started in February 2022. The Norwegian state-owned giant extended this contract several times using the optionality mechanism embedded within the original deal. The latest extension option was exercised in July 2022.

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This will keep the rig booked into the third quarter of 2023, although, Equinor still has the opportunity to add more wells to the rig’s work scope under the continued optionality mechanism.