Transocean keeps 2001-built floater busy in Norway

  • Exploration & Production

Floating rig contractor Transocean has won a contract for its 2001-built semi-submersible drilling rig Leiv Eiriksson.

Leiv Eiriksson drilling rig; Source: Concedo
Leiv Eiriksson drilling rig; Source: Concedo

Following the recent fleet status report released mid-October in which it said it had scored three rig contracts worth $75 million, Transocean’s CEO Jeremy Thigpen has this week announced that a deal was also signed for the harsh-environment rig Leiv Eiriksson with ConocoPhillips in Norway.

According to the earnings call transcript shared earlier this week by The Motley Fool, Thigpen said:”…I’m pleased to report ConocoPhillips just recently signed the Leiv Eiriksson [drilling rig] for 125 days at a healthy day rate in Norway, starting in August of 2020.”

The rig is currently on a contract with ConocoPhillips, which has recently been granted consent to use the Leiv Eiriksson to drill at the Enniberg prospect the North Sea offshore Norway.

This contract is set to expire in January 2020, after which Lundin Petroleum will have a fixed price option to used the harsh-environment between February 2020 and April 2020.

Thigpen said the harsh environment rig market in Norway remained strong, with several programs on the horizon that will keep the market for hi-spec floaters at full utilization, supporting higher base rates.

Thigpen did not reveal the day rate details for the Leiv Eiriksson contract with ConocoPhillips. According to Bassoe Analytics, the Leiv Eiriksson’s current dayrate is around $170,000.

In the conference call, Thigpen painted an optimistic picture of the harsh-environment market. He said: “…we remain pleased with the direction of the high specification harsh environment market where our top-tier assets are fully utilized and day rates for certain assets are approaching, and in some specialized cases exceeding $400,000 per day,” Thigpen said.

Transocean obtained possession of the Leiv Eiriksson semi-sub in December last year when it acquired rival Ocean Rig. The acquisition added nine hi-spec ultra-deepwater drillships and two harsh-environment semi-submersible rigs – the Leiv Eiriksson and its sister-rig Eirik Raude.

While the Leiv Eiriksson has managed to defy its age and has been drilling in Norway, Transocean in February 2019 decided to scrap its sister rig Eirik Raude citing the “prohibitive” reactivation costs, as the Eirik Raude had been stacked for two years.

The 2002-built Eirik Raude was in 2018 on the verge of avoiding the chopping block as its previous owner Ocean Rig in May 2018, had agreed to sell the rig, and the Leiv Eiriksson sister unit, to Valiant Offshore.

The Eirik Raude rig was to be reactivated and delivered to Valiant “within twelve to fifteen months.” However, just days later the Ocean Rig and Valiant said the deal was off, without providing further details.

Offshore Energy Today Staff

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