Norwegian offshore drilling contractor Odfjell Drilling has signed a letter of intent with oil company Equinor for the use of its Deepsea Atlantic offshore drilling rig for the development of the Johan Sverdrup Phase 2 offshore Norway.
The letter of intent for the provision of the drilling and completion services at the next phase of the giant Johan Sverdrup field development, is subject to the finalization of the contract. The contract is set to begin in Q1 2022 with a duration of twelve (12) firm wells plus five (5) optional wells.
Odfjell Drilling said that the approximate contract value for the firm scope is up to USD 150 million (excluding any integrated services, modifications/upgrades, and mobilization/demobilization fees).
Further, Odfjell Drilling said that "a notable performance incentive rate" will apply when wells are delivered ahead of target.
The rate for the optional wells is at a premium to the firm wells, Odfjell said, without providing info on how much more expensive the optional well would be.
Simen Lieungh, CEO Odfjell Drilling AS, says: "This contract award has come at an important time for Odfjell Drilling with the current challenges faced by the industry.
"We acknowledge Equinor for proceeding with long term developments such as Johan Sverdrup in this climate and we shall deliver on the trust they and the partners have placed in Odfjell Drilling. We saw that our performance on Phase 1 of the Johan Sverdrup development in 2016 set a new benchmark for harsh environment drilling.
Together with Equinor and its partners, we intend to take the next step and set a new benchmark on the Johan Sverdrup Phase 2 wells.
With the introduction of innovative solutions and a focus on sustainability, the wells will be completed with a minimum carbon footprint, the minimum risk to personnel, and ultimately at minimum cost for Equinor and its partners."
“Johan Sverdrup phase 2 is the next stage in the development of the giant Johan Sverdrup field and a project that strongly impacts activities and spinoffs in Norway. With this contract, Norwegian suppliers have been awarded more than 90 percent of the project contracts,” says Geir Tungesvik, Equinor’s senior vice president for project development.
“Deepsea Atlantic drilled the Johan Sverdrup phase 1 wells with excellent results, so we are pleased to secure the rig for phase 2 as well. The rig is already on a continuing contract with Equinor, and our ambition is to keep it busy until Johan Sverdrup phase 2 comes on stream at the end of 2022. Odfjell has a high safety standard and the rig is one of the most efficient rigs we have,” says Erik G. Kirkemo, Equinor’s senior vice president for drilling and well operations.
Johan Sverdrup phase 2 includes the construction of a subsea production system, reconstruction of the existing riser platform and a new processing platform, which will also accommodate a converter unit receiving power from shore. This unit will distribute power to other fields on the Utsira High: Edvard Grieg, Ivar Aasen, Gina Krog, and Sleipner. The four existing platforms on the Johan Sverdrup field are already receiving power from shore and CO2 emissions per barrel are 0.7 kg.
The phase 2 development will increase the field production capacity from 470,000 to 690,000 barrels per day on the plateau. The break-even price will be below USD 20 per barrel, making Johan Sverdrup a highly profitable field with a very low CO2 footprint.
The Johan Sverdrup license partners are Equinor (operator), Lundin, Petoro, Aker BP and Total.
Odfjell Drilling's the Deepsea Atlantic is a sixth generation deepwater and harsh environment semi-submersible. This unit, along with its sister rig Deepsea Stavanger and Deepsea Aberdeen, is a dual derrick, dynamic-positioned unit of enhanced GVA 7500 design.
The semi-submersible is designed for operations in harsh environments and at water depths of up to 3,000 m. It is equipped with a full conventional mooring spread for operations in water depths of 70 to 500 meters. T