Northern Offshore's subsidiary, Northern Offshore U.K. Ltd, was awarded a contract with Caspian Drilling Company Limited ("CDC") for the provision of support services for drilling operations in the Caspian Sea. The contract runs to July 2011 and has an estimated value of approximately US $21 million, comprised of fees for technical and operational support in management of the Dada Gorgud semisubmersible drilling rig. Any direct costs incurred in providing the services will be reimbursed. CDC is a subsidiary of The State Oil Company of Azerbaijan Republic ("SOCAR").
The drilling operations will take place on acreage operated by BP, on behalf of a consortium consisting of BP, Chevron, SOCAR, INPEX, StatoilHydro, ExxonMobil, TPAO, Devon, ITOCHU and Hess. CDC has been the semisubmersible drilling rig contractor on this acreage for more than 14 years. Northern Offshore's technical and operational support services will be provided by its Baku-based personnel, with assistance from the regional operations team based in Aberdeen, Scotland.
Northern Offshore Senior Vice President of Marketing Steve Gangelhoff said, "This is an important financial and strategic opportunity for Northern Offshore. It not only brings significant cash flow to the company, but also expands our working relationship with some of the world's most influential international oil and gas companies. The Caspian Sea is a core area for BP and the other consortium members, and we are excited to be chosen to contribute to such an important effort and given the opportunity to strengthen relationships with these companies."
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