Statoil, Partners Acquire Two Cat-J Rigs (Norway)

The licence partners of Gullfaks and Oseberg Area Unit have acquired two new category J jack-up rigs. The rigs will be owned by the licenses and will contribute to increased recovery and extended field life.

Samsung Heavy Industries Co. Ltd. and Operator KCA Deutag Drilling Norway AS have been awarded the contracts for construction and operation of two category J rigs. Start of operation is expected in 2016-2017.

The operation contract is for an initial period of eight years with the option to extend by 4×3 years. The contract value is of the order of 900 million USD for the initial contract.

The category J rig intake is part of Statoil’s long term rig category strategy to rejuvenate its rig fleet, secure long term rig capacity and reduce drillings costs to improve NCS recovery rates. The license ownership model has been developed in close cooperation with the licence partner Petoro.

Drilling of more wells is the single most important measure to increase recovery from the fields and to meet Statoil’s ambitious target of an average of 60 per cent recovery from the NCS assets.

“This is an important milestone for both Oseberg and Gullfaks. The awards will secure vital rig capacity for both licenses at very competitive prices. Reduced drilling costs are important to increase recovery and to maintain production in Oseberg Area Unit and Gullfaks for decades”, says Øystein Håland, head of Operation West in Statoil.

Both Gullfaks and Oseberg have a long term rig demand, and it is premised that the new rigs will operate at these fields for a long period. The drilling costs will be significantly reduced as a result of the ownership model and this will improve robustness of drilling targets or even add targets that would not otherwise be profitable.

“The market response to the ownership model has proven to be very competitive. This will give us rigs at right cost and well suited for the operation on these two licences”, says Jon Arnt Jacobsen, chief procurement officer in Statoil.

New tailor-made rigs

The new category J rigs will be able to operate in harsh environments at water depths from 70 to 140 meters and drill wells with lengths up to 10,000 meters. The rigs are based on proven technology, but optimised to allow for more efficient drilling and completion of subsea wells compared to the existing jack-up fleet.

The primary use will be drilling and completion of production wells.

Operating model:

The rigs will be owned by the Gullfaks and Oseberg licensees, but will be operated by a drilling contractor.

“Statoil is continuously working to secure a rig fleet with the right capacities and capabilities to suit our needs.  We are therefore taking steps to rejuvenate the rig fleet and ensure that the right rigs meet the right requirements,” says Jon Arnt Jacobsen.

“The new long-term operation contracts secure predictability for the licenses and for the drilling contractor. The drilling contractor will perform drilling services and maintenance. Hence, the operating and manning model is similar to the model used for leased rigs. As a long-term industrial player on the NCS, we cooperate with the suppliers to develop new and cost-effective solutions,” says Jacobsen.

Partners at Gullfaks: Statoil, Petoro

Partners at Oseberg: Statoil, Petoro, Total E&P, ConocoPhillips