Statoil ASA has awarded a drilling contract valued at $655 million, including mobilization costs, to Noble Corp. for a newbuild ultra-high specification jackup.
The rig, an enhanced version of Statoil's Cat J specifications, will begin a four-year drilling contract in the third quarter of 2016 for Statoil at the Mariner project in the UK North Sea. Statoil is operator of Mariner, located on the East Shetland Platform approximately 150 miles east of the Shetland Isles.
The newbuild jackup will be based on the Gusto MSC CJ-70-150 design, and uniquely suited to operate over a very large platform or in a subsea configuration in the Norwegian sector. It will be capable of operating in up to 492 feet (150 meters) of water in harsh environments, with total drilling depth capacity of 33,000 feet (10,000 meters). The rig also will be capable of deploying either a surface or subsea blowout preventer when drilling wells in these challenging environments.
"We believe that the fundamentals of the high-specification jackup market segment will continue to be strong in the decade ahead," said Noble President and Chief Executive Officer David W. Williams in a statement Tuesday. "This unit is designed to meet some of the industry's most stringent operating requirements and supports Noble's ongoing commitment to increasing the technological and operational capabilities of our fleet."
Zug, Switzerland-based Noble is negotiating a contract for the new jackup, which will have construction and delivery costs of approximately $690 million, including project management, spares and start-up costs, but excluding capitalized interest.
The deal will position Noble strategically with a key North Sea operator, and continues to recent trend among offshore drillers opting to build jackups versus additional ultra-deepwater floaters, according to a May 14 analyst note from Tudor Pickering and Holt.
Noble has eight jackups currently operating in the North Sea, and is expected to deploy several of its JU-3000N newbuilds to the region, but has no rigs currently working for Statoil, according to a May 14 GHS Research analyst note. GHS also sees opportunity for second newbuild in the future. However, the economics of the deal aren't attractive when the build cost and cash flows are combined versus the recent newbuild drillship and jackup awards obtained by Noble.
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