Seadrill gets suspension for jack-up contract in Middle East
- Business & Finance
Offshore drilling contractor Seadrill has received a contract suspension for the jack-up drilling rig AOD II operating in the Middle East due to changes in the drilling program.
The AOD II rig is owned by Asia Offshore Drilling (AOD), which is a partnership venture between Mermaid and Seadrill.
Mermaid has a 33.76 per cent interest in the partnership and Seadrill has a 66.24 per cent stake.
Mermaid said on Monday that AOD had temporarily suspended operations with the AOD II rig for a period d 12 months.
The suspension is due to the impact to the ultimate customer’s drilling program from adverse crude oil price movements affecting the oil and gas industry and with it the offshore drilling services sector, Mermaid explained.
The ultimate customer also has the right to recall the rig back to work at any time during the suspension period.
AOD had earlier secured a three-year contract extension for AOD II starting on 15 April 2020 serving this ultimate customer.
This suspension, which had started upon completion of the last well in progress, will be at a zero-day rate and will automatically extend the term of the contract for a period equal to the suspension.
Although Mermaid does not mention it, according to Seadrill’s fleet status report, the AOD II rig is working for Saudi Aramco and it has been since 2013.
Under the previous terms, the rig’s contract was supposed to end in April 2023.
The rig’s day rate under this contract with Saudi Aramco is $89,900.