Transocean lands strategic collaboration deal with Equinor and secures more work for two rigs

Norwegian state-owned energy giant Equinor has inked a strategic collaboration agreement with Transocean and added more work to the backlog of the offshore drilling contractor’s two semi-submersible rigs, which will continue to carry out operations offshore Norway.

Equinor reported on Tuesday, 28 March 2023, that it had handed out more work to Transocean’s Transocean Encourage rig – mainly for operations in the Norwegian Sea – and the Transocean Enabler rig, which got a drilling assignment at the Johan Castberg field. Currently, the rigs are on eight-year contracts with Equinor that expire on 1 December 2023 and 1 April 2024, respectively. This will be the first contract extension since the rigs were built, as so-called Cat D rigs, specialised for Norwegian conditions.

Mette H. Ottøy, Equinor’s chief procurement officer, remarked: “We are pleased to sign a strategic collaboration agreement with Transocean, which is one of our largest rig suppliers. This reflects our perception of Transocean as a major contributor to our capability to realise our offshore ambitions also in the years ahead.

“We have been working closely for many years, and are now further expanding this cooperation by reserving one rig for the drilling of both production and exploration wells in the Norwegian Sea, and one rig for the development of the Johan Castberg field.”

According to Equinor, the drilling programme in the Norwegian Sea consists of nine wells to be drilled on the Tyrihans, Verdande, Andvare and Vigdis fields. The company explains that Verdande and Andvare will be tied into the Norne field. In addition, the drilling programme includes exploration wells and may be further extended to add six more wells. The estimated total value of the nine wells is about $191 million, and the drilling campaign is expected to start on 1 December.

Regarding the Johan Castberg field, the Transocean Enabler rig will have a fixed drilling programme of 19 wells and options on another eight additional wells. The total contract value is estimated at $415 million, with the fixed part accounting for $295 million. The new contract will come into effect between 1 April and 1 July 2024. The partners in the Johan Castberg licence are Equinor (operator with 50 per cent interest), Vår Energi (30 per cent) and Petoro (20 per cent).

Furthermore, the strategic collaboration agreement will drive improvements in technology and innovation related to safety, efficiency and greenhouse gas emissions. The estimated contract values include drilling services such as casing running, wastewater treatment, cuttings management and two remotely operated vehicles (ROVs). The agreement for the Transocean Enabler rig also includes wired drill pipe services.

Erik G. Kirkemo, senior vice president for drilling & well, commented: “We are now securing hot rigs, which we, together with Transocean, have already invested in upgrading, thus improving safety, reducing emissions and increasing efficiency. Operating for us for the past eight years, we already know the rigs well. We, therefore, have a lot of experience to build on, and we look forward to continuing our collaboration delivering safe and efficient wells.”

In a separate statement, Transocean confirmed contract awards for two of its harsh environment semi-submersible rigs, representing approximately $382 million in firm contract backlog. As part of the contracts, each rig will receive customer-paid upgrades to digital management systems, robotics, and operational automation, which are expected to further reduce emissions from the rigs and enhance personnel safety.

Jeremy Thigpen, Transocean’s Chief Executive Officer, stated: “We are pleased to secure these new contracts and to further strengthen our relationship with Equinor. These contracts and our strategic collaboration agreement demonstrate our long-term commitment to working together to provide innovative solutions that deliver value to both our companies.”

The 2016-built Transocean Encourage and Transocean Enabler are sixth-generation fully winterised, harsh environment semisubmersible rigs with automated drilling control specially designed for operations on the Norwegian continental shelf. In addition to these two rigs, Transocean Spitsbergen also has a contract with Equinor for the next few years.