Odfjell gets early termination and new gig for semi-submersible

Offshore driller Odfjell Drilling has received a notice of early termination from oil major BP for the charter of the Deepsea Aberdeen rig but, concurrently, secured work for the rig with Wintershall Dea.

Odfjell said on Monday that the contract with BP for originally set to expire in April 2022. Odfjell will be compensated with an early termination fee through monthly payments until April 2022.

It is worth reminding that the Deepsea Aberdeen started working for BP in April 2015 under a seven-year contract.

Concurrent with the BP termination, Odfjell Drilling was awarded a contract by Wintershall Dea Norge for use of the Deepsea Aberdeen rig on exploration wells at Dvalin North and Bergknapp fields as well as development wells at Vega field on the Norwegian Continental Shelf.

The contract consists of four firm and three optional wells with an expected firm duration of approximately 300 days. The contract is anticipated to begin in February/March 2021. Also, Wintershall Dea and Odfjell Drilling entered into a long-term frame agreement for potential future rig needs.

According to the offshore driller, BP shall be entitled to a reduction in termination fee payments while the Deepsea Aberdeen is operating for Wintershall as the new contract falls within the original BP contract duration. 

In total, Odfjell Drilling expects to maintain the same net cash flow as would have been the case with continued operations under the original BP contract.

Simen Lieungh, CEO of Odfjell Drilling, said: “We would like to thank BP for their co-operation and support throughout the Deepsea Aberdeen contract thus far. We look forward to continued cooperation on the platform drilling operations provided by Odfjell Drilling.   

“The Wintershall Dea contract is an important addition to Odfjell Drilling and we look forward to once again working with Wintershall Dea in the Norwegian sector”.

Deepsea Aberdeen is at Coast Center Base (CCB) outside Bergen where it will stay while securing the acknowledgement of compliance with Norwegian authorities and preparing for the Wintershall Dea contract.

In a separate statement, Wintershall Dea said that the Bergknapp discovery in the Norwegian Sea was made in the spring of 2020 and will be appraised with the new rig in 2021.

With Dvalin North, also in the Norwegian Sea, the company is keen to continue exploring the area around its Dvalin gas field which is set to come on stream around the turn of the year.