Equinor Contracts Odfjell Rig for Up to 17 Wells

Equinor Contracts Odfjell Rig for Up to 17 Wells
Odfjell's Deepsea Atlantic semi-sub, above, will return to Johan Sverdrup. Photo by Marit Hommedal. PHOTO SOURCE: Equinor ASA

Operator Equinor and license partners Lundin, Petoro, Aker BP and Total have signed a letter of intent with Odfjell Drilling for the Deepsea Atlantic rig to drill 12 wells during Phase 2 of the Johan Sverdrup field development, Equinor reported Tuesday.

The Odfjell deepwater and harsh-environment semi-submersible rig drilled wells under the first phase of Johan Sverdrup, a Norwegian Continental Shelf oil field that Equinor expects will produce up to 470,000 barrels per day (bpd) in Phase 1 and another 220,000 bpd in Phase 2. Equinor anticipates Phase 2 drilling to start in early 2022. Moreover, it pointed out the field’s break-even price will be below US$20 per barrel.

“Johan Sverdrup Phase 2 is the next stage in the development of the giant Johan Sverdrup field and a project that strongly impacts activities and spinoffs in Norway,” remarked Geir Tungesvik, Equinor’s project development senior vice president, in a written statement emailed to Rigzone. “With this contract, Norwegian suppliers have been awarded more than 90 percent of the project contracts.”

Equinor stated that Phase 2 of Johan Sverdrup entails:

  • Constructing a subsea production system
  • Reconstructing the existing riser platform
  • Adding a new processing platform that will a converter unit receiving power from shore.

 “Deepsea Atlantic drilled the Johan Sverdrup Phase 1 wells with excellent results, so we are pleased to secure the rig for Phase 2 as well,” commented Erik G. Kirkemo, Equinor’s senior vice president for drilling and well operations. “The rig is already on a continuing contract with Equinor and our ambition is to keep it busy until Johan Sverdrup Phase 2 comes on stream at the end of 2022. Odfjell has a high safety standard and the rig is one of the most efficient rigs we have.”

According to Equinor, the fixed portion of the latest Deepsea Atlantic agreement amounts to approximately US$150 million at the current exchange rate. The estimate excludes the costs of integrated services, maintenance and options for drilling five extra wells, and the total contract value hinges on well delivery efficiency, the company added.

“This contract award has come at an important time for Odfjell Drilling with the current challenges faced by the industry,” Odfjell CEO Simen Lieungh noted in a statement from his firm. “We acknowledge Equinor for proceeding with long-term developments such as Johan Sverdrup in this climate and we shall deliver on the trust they and the partners have placed in Odfjell Drilling.”

To contact the author, email mveazey@rigzone.com.


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