Baker Hughes Bags Major Well Services Contracts for Skarv

BP Norway has awarded new major well services contracts to Baker Hughes Norge. The total value of the contracts is around NOK 800 million (over US $149 million) for the five year term and covers the Skarv phase one drilling program of 16 wells. The scope of the contract awards cover completion equipment and related services, well placement, drilling and completion fluids and electric wireline services. These contracts will run over a five year term with annual options.

"The above awards cover a major part of the Skarv drilling and completion services and is yet another key milestone achieved in preparing for Skarv drilling operations and progressing the Skarv development towards production start in 3Q 2011," said Trevor Garlick, Managing Director of BP Norge.

The planning of the well service operations starts immediately and operations will commence late 2009/2010.
Baker Hughes already has frame agreements for the provision of these services to BP Norway's existing assets. The award of the Skarv well services contracts, makes Baker Hughes the main well services provider to BP Norge. Baker Hughes has been selected to provide this key package based on their successful working relationship with BP Norway, a track record of performance on Valhall and other BP assets, and by demonstrating alignment with BP Norway HS&E, project delivery and commercial goals.

Given BP Norway's planned increased activity the total value of the BP Norge -- Baker Hughes business will be between NOK 2-3 billion over the coming five years.

BP Norge currently operates four producing fields offshore Norway; Ula, Tambar, Valhall, Hod and hold 13 licenses, 10 as operator. Ongoing investments are around NOK 45 billion in two major development projects Skarv FPSO and a new combined and production and hotel platform at Valhall.