Statoil Suspends 2 New Rigs Due to Overcapacity

Norwegian oil major Statoil reported Thursday that it will be suspending two new rigs due to overcapacity in the company's rig portfolio. Statoil said that the Transocean Spitsbergen (DW semisub) and the Songa Trym (mid-water semisub) will be suspended through the rest of 2014 and that the suspension period may be extended.

Currently the Spitsbergen rig is in the Barents Sea, where it is involved in completing the Saturn well and will soon cut and retrieve the wellhead in the Mercury exploration well. Then, in around mid-November, the rig will be suspended for the rest of the year.

Statoil said the suspension is the result of overcapacity in the firm's rig portfolio and unsuccessful attempts to find alternative assignments for the rig.

Statoil Chief Procurement Officer Jon Arnt Jacobsen commented in a company statement:

"The exploration program has been highly efficient. Transocean Spitsbergen drilled the last seven wells 40-percent faster than the industrial average in the Barents Sea. This allowed two more wells than originally planned to be drilled. We are very pleased with the work performed for us by Transocean. Unfortunately we are now in a situation of overcapacity, at the same time as the industry is facing high costs and lower profitability."

Songa Trym will be suspended after the rig has completed plugging a well on the Oseberg field in the North Sea. This job is also scheduled to be completed in mid-November.

"Songa Trym has delivered well on efficiency and safety, and we would have liked to use the rig also for the rest of the year. We have tried to find new assignments for the rig, but our attempts to realize the identified options have not been successful. We are now together with our partners maturing identified drilling assignments for both rigs for 2015," Jacobsen added.

After the two rigs are suspended Statoil will have 13 rigs in activity on the Norwegian Continental Shelf.



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