Northern Offshore is delaying the delivery of two of its high specification jackups due to the downturn of the drilling market.
The West Navigator. From NADL.
Northern was able to negotiate a nine-month delay for the Energy Engager and Energy Encounter with a Chinese shipyard. The new dates for delivery are December 2016 and June 2017, respectively.
“We sincerely appreciate the cooperation of our shipyard to allow us to delay the delivery of these units to enable us to better match contract opportunities in what we believe will be a more robust market at that time,” says Gary Casswell, Northern Offshore president and CEO. This will allow us to defer approximately US$22 million in owner furnished equipment expenditures for these units from calendar year 2015 to 2016.”
Northern Offshore has experienced a string of cancelations for its jackups, with the latest coming from Russian oil giant Rosneft just last week.
Rosneft sent North Atlantic Drilling Co. (NADL) a cancelation notice for the Northern-owned Energy Endeavor. The jackup was part of a multi-rig contract to provide drilling services in the Russian Arctic that was slated to begin this summer.
The Energy Endeavor had a US$150 million, 2.5-year deal that was executed in July 2014 between Rosneft, NADL and Northern.
Also in March, Rosneft axed the contract for the West Navigator, which was also scheduled to begin work this summer, reducing NADL’s contract backlog by $1 billion.
The West Alpha was pulled from the Arctic in September 2014 due to sanctions. The vessel was under contract with Rosneft and ExxonMobil to drill in the East-Prinovozemelskiy-1 license, at the Universitetskaya-1 well.