Murphy Oil to Take Pacific Drilling Rig on a Ten-Well Term in 2021. Scraps 2020 Deal

Bartolomej Tomic
Thursday, July 30, 2020

Offshore drilling contractor Pacific Drilling has lost a two-well contract for its Pacific Sharav drillship with Murphy Oil, but has managed to secure a ten-well deal with the same client, only at a later date.

The drillship recently completed work for Chevron in the Gulf of Mexico and was going to be warm-stacked ahead of its two-well contract with Murphy. 

The contract, signed in March 2020, had been expected to start in the Gulf of Mexico in the fourth quarter of 2020.

However, Pacific Drilling said Wednesday that Murphy had canceled the two-well Gulf of Mexico drilling deal for an undisclosed termination fee.

Instead of the two-well contract, Murphy will hire the rig on a ten-well firm contract in the Gulf of Mexico. The contract is expected to start in the second quarter of 2021, and is for approximately 450 days. The dayrate is set at $180,000, meaning the contract is worth around $81 million.

The contract provides for five option wells at a market-based rate.  

The now-canceled two-well contract for the 2014-built drillship had had an agreed dayrate of $230,000.

Equinor termination

Pacific Drilling currently has seven deepwater drillships in its fleet: Pacific Bora, Pacific Mistral, Pacific Scirocco, Pacific Santa Ana, Pacific Khamsin, Pacific Sharav, and Pacific Meltem.

The Pacific Khamsin drillship in the U.S. Gulf of Mexico, used by Total, is the only Pacific Drilling rig actually working at the moment. However, this is soon to change, as the rig will end its contract in September. 

The Pacific Khamsin was then expected to go a one-well contract with Equinor, but Pacific Drilling said Wednesday that Equinor had canceled the contract for a termination fee.

Also, as previously reported, the Pacific Santa Ana drilling rig had been working on a P&A program for Petronas in Mauritania that should've kept it busy until December 2020. However, Petronas in March declared force majeure on the contract and placed the rig on standby at 70% of the contractual dayrate through April 28, 2020. The dayrate has now been further reduced. 

"We have agreed with Petronas to continue on stand-by up to March 31, 2021, at 35% of the contractual dayrate," Pacific Drilling said.

The Pacific Santa Ana, along with the Pacific Bora, the Pacific Mistral, and the Pacific Scirocco, has been stacked in Las Palmas. 

Moreover, the Pacific Meltem earlier in July departed from Louisiana and is set to reach Las Palmas for stacking in the next few days.

Categories: Energy Deepwater Drilling Industry News Activity Europe North America Gulf of Mexico Rigs

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