Oilfield services giants Baker Hughes, Halliburton, and Schlumberger have signed a contract extension with the Norwegian oil and gas company Equinor for the integrated drilling and well services on Equinor-operated fields offshore Norway.
Equinor said Friday it was, at the same time, extending its contracts for additional services (specialist service contracts) with the trio as well as 13 other suppliers. The contracts will apply for two years from June 1.
The contract extension for drilling services has an estimated total value of approximately NOK 14 billion (around $1,47 billion) and will give work to around 2000 people distributed on 18 fixed platforms and 10 mobile rigs, Equinor said.
The total value of specialist services in the same period is calculated at close to NOK 6 billion ($630,47 million). The specialist services will employ some 600 people.
Mette H. Ottøy, chief procurement officer said: “Long-term supplier relations have proved to be important in an industry swaying rapidly between good and more challenging times. It ensures predictability and is important to develop this industry in a safe, efficient and sustainable way. We are pleased to extend these contracts, and it’s an expression of the good collaboration with our suppliers. These contracts are central in our value creation on the NCS,” says
Integrated contracts benefits
In the drilling service contracts established in 2018, the services were gathered in one contract format, giving one supplier the main responsibility for integrated drilling services, cementing and pumping, drilling and completion fluids, electrical logging and completion on each installation.
“We see clear benefits from integrated contracts. They have been fundamental to modernizing the way we work, both by the establishment of operations centers, solving tasks jointly across disciplines, and applying new technologies for close communication between the offshore and onshore organisations. The integrated contracts are well complemented by the framework contracts for specialist services. We are well pleased with the contracts we are extending, and look forward to continuing our joint improvement work,” says Erik G. Kirkemo, Equinor’s senior vice president for drilling & well operations.
Equinor has also shared details on which company won which rig/platform contract (with asterisk denoting shared delivery). See below:
Drilling service contracts
Baker Hughes: Grane A, Oseberg B - C - East - South, Transocean Equinox, Transocean Endurance, Noble Lloyd Noble*, Visund A*, Deepsea Atlantic, Rowan Stavanger, Heidrun A*, Askepott and Johan Sverdrup*
Halliburton: Njord A, Heidrun A*, Snorre A - B, Kvitebjørn A*, Noble Lloyd Noble*, Transocean Enabler*, Transocean Encourage and Transocean Spitsbergen
Schlumberger: Gullfaks A - B - C, Kvitebjørn A*, Statfjord A - B - C, Visund A*, Deepsea Stavanger, Askeladden, Noble Lloyd Noble*, COSL Promoter, Deepsea Aberdeen, Johan Sverdrup* and Transocean Enabler*
Specialist service contracts will be extended with the following suppliers: Halliburton, Schlumberger, Baker Hughes, Weatherford, Ramex, NOV Wellbore Technologies, Petroleum Technology Company, TCO, Interwell, Welltec Oilfield Services, Roxar Flow Measurement, Sekal AS, Archer Oiltools, Silixa, Tendeka and Ardyne.
In a statement confirming the contract with Equinor, Archer Oiltools said it had secured a 2-year contract extension.
The contract covers plug and abandonment, fishing and downhole mechanical isolation equipment. Based on current activity levels, the additional backlog is estimated at $60 million for the 24 months period which will commence in June this year.
Hugo Idsøe, Vice President, Archer Oiltools, said: "This is a strategically important extension for Oiltools in one of our core markets, which further strengthens our footprint and presence in the region. Our technology and strong record of execution in the North Sea makes us a supplier of choice for Equinor. We continue to support Equinor’s requirements for safe and efficient operations while providing proprietary low carbon solutions and operational efficiencies to further their energy transition goals.”