OE13: Rig consortia for UK?

September 5, 2013

“Establishing a successful rig consortium is a roller-coaster process”, Geir Kristian Pedersen, managing director of Rig Management Norway (RMG), said at the keynote session Planning for Long Term Drilling yesterday.

Key factors in building a consortia are being co-operative, flexible, and responsive, he said. There also needs to be transparent processes, with a neutral facilitator and open communication.

RMG is the facilitator for five consortia in Norway deploying the West Alpha, Borgland Dolphin, Transocean Arctic and Leiv Eirikson rigs. The West Alpha consortium started in 2009, involving five operators, a three year contract and 17 wells.

The benefits were securing capacity in a tight market, joint tendering for services, well management resulting in long-term contracts and continuity. There had also been considerable savings – at about $50-60 million for the lead operator, BG, alone. Pedersen was confident that a similar model could be used in the UK sector.

Mike Tholen, economics and commercial director of Oil & Gas UK, said it was essential to stem the production decline and recover more from existing fields but that production drilling was under pressure from cost and availability. The UK fiscal regime had flexed to promote new activity, but the UK rig fleet is aging, and the few new units replacing them have high technology – and high costs.

Image:  The Sedco 712 in the Cromarty Firth.



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