Sanctions reason behind rig deal delay, Northern Offshore says

Offshore driller Northern Offshore has confirmed that the Western sanctions against Russia were the reason behind the rig contract delay with Rosneft, as announced on Friday, November 27, 2014.

The execution of the contract for the Energy Endeavour jack-up rig valued at around $150 million has been postponed for May 2015. The contract was originally signed last year.

In an e-mail sent to Offshore Energy Today, a Northern Offshore spokesperson said: “The reason for the delay is due to the sanctions currently imposed by the EU and the US Commerce Dept. The delay or “suspension” of the agreement until May 2015 is to allow for possible lifting of the sanctions between now and then permitting the contract to go forward.”

While it said it would remain committed to the Rosneft deal, Northern Offshore on Friday said it would market the rig to other potential clients, once the rig’s current contract is complete.

The Energy Endeavour is currently operating for Wintershall, in the Dutch sector of the North Sea.

Early terminations of charters

Elsewhere, in the offshore support vessels sector, Karmorneftegaz, a joint venture company between Rosneft and ExxonMobil, established for drilling operations in the Kara Sea, yesterday cancelled several support vessels charters.

Rem Offshore had contracts cancelled for two platform supply vessels, and Siem Offshore received a cancellation notice for two of its AHTS vessels and one PSV.

Furthermore, Swedish company Viking Supply Ships received an early termination for three of four AHTS vessels.

Rosneft did not reply to Offshore Energy Today’s e-mails seeking comment on what the cancellations and rig delay mean for the Kara Sea exploration campaign in 2015.

To remind, Rosneft and ExxonMobil recently made an oil discovery at what was described the world’s northernmost well – the Universitetskaya-1 – in the Kara Sea, offshore Russia.

Subsequently, ExxonMobil had to pull out from the project, due to the Western sanctions against Russia, imposed for its involvement in the Ukraine crisis.

Offshore Energy Today Staff