Aker Solutions to Provide $1.9B Intervention Services for Statoil
Aker Solutions has entered a long-term agreement with Statoil to provide a full range of heavy well intervention and light drilling services on the Norwegian continental shelf. The contract period is for eight years, with options for three further two-year periods (2+2+2). Contract value for the initial eight-year period is approximately $1.9 billion. Work will be performed from a new build Category B well intervention rig, which will be owned and operated by Aker Solutions' subsidiary Aker Oilfield Services.
"Aker Oilfield Services was set up five years ago to develop smart, cost-effective solutions for vessel-based intervention services. In 2009 we took full ownership of the company with the objective of using it as a vehicle to develop an integrated delivery model that fully capitalizes on Aker Solutions' broad portfolio of oilfield products, systems and services, in order to create new business opportunities. This ability to bundle technology and expertise has proven to be a competitive advantage when bidding for this contract. It will involve deliveries from our oilfield service arm, engineering, drilling technologies, subsea and well intervention services," said Øyvind Eriksen, executive chairman, Aker Solutions.
"The Norwegian continental shelf is recognized world-wide for its high recovery rates. With the Cat-B initiative, Statoil and their partners is taking a quantum leap by taking a fully integrated approach to increasing recovery rates from subsea wells. We are pleased to support Statoil in the development of this new technology and innovative business model," added Eriksen.
The Category B (Cat-B) rig is a semisubmersible unit designed for year-round well intervention. It will provide a full range of heavy well intervention and light drilling tasks including through-tubing rotary drilling, wireline, coil tubing, high pressure pumping, well testing and cementing services as well as ROV operations. It will operate in water depths up to 1,640 feet (500 meters).
Well intervention services are carried out in an oil or gas well, with the objective of maximizing production and increasing the recovery rate of oil and gas. Well intervention has traditionally been performed from fixed platforms. In more recent years, specially equipped ships or rigs have been developed to undertake the same type of service on subsea wells where recovery rates have been much lower.
The subsea well intervention system - i.e. the infrastructure between the rig and the seabed - is based on the technology solutions developed for Aker Oilfield Services' deepwater well intervention vessel Skandi Aker. This is, as on Skandi Aker, a riser-based intervention system consisting of a high-pressure riser and well control package, which is connected to a subsea tree to secure safe entry into subsea wells.
"From the outset our ambition was to develop a subsea well intervention solution that would become a game-changer in the market. To win this contract is a great reward for all the hard work and investments we have put into the concept," said Karl Erik Kjelstad, president of Aker Oilfield Services and head of the Oilfield Services and Marine Assets (OMA) business area in Aker Solutions.
"The award confirms our business model, and will pave the way for a long-term development for this part of our business," Kjelstad added. In addition to the new Cat-B rig, Aker Oilfield Services' fleet include the deepwater well intervention vessel Skandi Aker, the deepwater intervention vessel Skandi Santos and the subsea construction vessel Aker Wayfarer. In addition to Statoil, the company currently works with Petrobras and Total, which also are among the world's leading operators of deepwater fields.
Skandi Aker is primarily equipped to perform well intervention operations between (2,625 and 9,843 feet) 800 and 3,000 meters water depth. Similar equipment may be installed on Aker Wayfarer at a later stage. Other light well intervention vessels operate mainly up to 2,625 feet (800 meters) water depth. The new Cat-B intervention rig will have a significantly larger operating window than other existing units - an important factor in the harsh environment on the Norwegian continental shelf.
Tailor-made and efficient
"Together with Statoil and their partners we are effectively filling the gap between conventional drilling rigs and light well intervention units. By providing a rig that is tailor-made for intervention purposes, including integrated service lines, we expect significant cost reduction for well intervention operations," said Kjelstad.
The contract will be managed out of Aker Oilfield Services' offices at Skøyen, Oslo. The riser and well control package will be supplied by Aker Solutions' subsea technology and manufacturing center at Tranby in Lier, Norway. Aker Solutions will also supply the conveyance equipment and intervention services including coil tubing and wireline - a market segment where the company is the market leader on the Norwegian continental shelf - through its well service business that operates out of Stavanger, Norway. Aker Solutions will also provide the facilities to enable a third party contractor to supply cementing services, which Statoil will manage under a separate contract.
The EPC contract to build the Cat-B rig is currently under negotiation with reputable yards. The rig's derrick and handling system will be provided as a subcontract to the chosen rig yard by Aker Solutions' drilling technologies business managed from Kristiansand, Norway.
Aker Solutions already has access to the necessary funding, but is also considering various options for asset financing of this investment.
The Cat-B intervention rig is expected to start operations in the second half of 2015.
Contract party for the agreement is Aker Oilfield Services AS, which is a wholly-owned subsidiary of Aker Solutions.
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