Aker Spitsbergen Ready for Operations

The Aker Spitsbergen left Norway's Klosterfjorden in Sunnhordland community, for field deployment in the Norwegian Sea. The advanced drilling rig arrived on site Monday morning, ready for drilling and well operations at the Halten Nordland region, where Statoil is the operator.

Construction and completion of the rig have taken longer than anticipated. Under the original contract, the rig was to be delivered and ready for operations in February 2008. One year ago, it was announced that the rig would be ready for operations in the summer of 2009. However, deployment is taking place in January 2010.

In August 2009, the rig formally began its contract with Statoil, following protracted negotiations between Statoil and Aker Drilling regarding practical and financial consequences of the delays, including liquidated damages for late delivery, additional equipment costs, and day rates.

"Naturally, the delays and cost increases were disappointments. Now, however, we at Aker Drilling are extremely pleased that Aker Spitsbergen has also commenced operations. Finally, the rig's highly qualified crew can demonstrate their skills at sea and prove just how safely and efficiently this sophisticated rig will operate," said Geir Sjøberg, Aker Drilling's President and CEO.

Upgrades

As early as in May this year, Aker Spitsbergen will again be wharfside. As part of the August 2009 negotiations with Statoil, the parties agreed to upgrade the rig in the second quarter of 2010. The upgrades will make the rig even more efficient at subsea well completion work and other operations.

While the exact duration of the layover has yet to be determined, it will presumably last between 6 and 10 weeks. During that period, various minor rig improvements will also be made. No day-rate revenues will accrue during the shipyard layover.

"We greatly appreciate the close cooperation we have had with Statoil during construction and completion of the rig. Statoil could have opted to cancel the contract, but instead chose to continue working with us. Our efforts are now focused on operational excellence and making our rig the best on the Norwegian continental shelf," said Geir Sjøberg.