Norwegian drilling contractor Odfjell Drilling has sunk into the red and suspended 2014 dividents after taking a major write-down on its Deep Sea Metro assets.
The firm's US$27 million loss comes despite the firm today (25 February) also announcing a large contract win on the giant $15.4 billion, Norwegian North Sea Johan Sverdrup development.
Odfjell Drilling will be contractor Aibel's major sub-contractors for engineering, procurement and construction (EPC) contact on the drilling platform topside. The contract runs until 2018 and will involve approximately 50 engineering professionals working various degrees in the project. The contact has an estimated value of about NOK 110 million ($14.4 million).
The handover of the finished platform topside will be in Q2 2018. The total contract has an estimated value of NOK 8 billion.
According to Odfjell's results, part of its losses, on revenues of $268 million for Q4 2014, relate to a $71 million write-down on the drillships, the Deepsea Metro I and Deepsea Metro II, in which it has a 40% stake. The Deepsea Metro I finished operations in Tanzania late last year and is now anchored in South Africa waiting for a contract.
Reflecting the current tough market conditions, Odfjell's backlog has also slipped, from $5.1 billion in Q4 2013 to $3.9 billion in the same quarter of 2014.
However, in March the firm's latest unit, the Deepsea Aberdeen, is due to start on a seven-year contract with BP west of Shetland in the UK sector. The harsh environment, deepwater semisubmersible drilling unit was delivered from Daewoo Shipbuilding & Marine Engineering last year and is currently in transit to the UK sector.
The Johan Sverdrup field is one of the largest discoveries on the Norwegian shelf.
The first phase will be developed with four installations including housing, one drilling, one riser and a process platform, and three subsea templates for injection.
Johan Sverdrup is located on the Utsira High in the North Sea, 155km west of Stavanger and is one of the five biggest oil fields on the Norwegian Continental Shelf. The field is about 1900m deep, in 110-120m water depth, and covers about 200sq km.
In addition to Odfjell Drilling, National Oilwell and Nymo will make important contributions to the building of the platform deck.
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