Norwegian offshore drilling company Odfjell Drilling will recycle its oldest drilling rig the Deepsea Bergen, to focus on its modern, harsh-environment drilling rigs.
In a quarterly update on Thursday, Odfjell said that the Deepsea Bergen rig had been idle since completing its operations with MOL on March 23.
After sitting workless at CCB yard in Norway for a few months, Odfjell Drilling directors decided to recycle the 37-year-old unit.
The semi-submersible drilling rig Deepsea Bergen is a self-propelled semi-submersible unit of enhanced Aker H-3.2 design.
The rig was built in Norway and delivered in 1983 and has operated mainly in the Norwegian sector of the North Sea since its launch. The rig was upgraded in 2012. The upgrade included increased living quarters capacity and improved BOP handling facilities.
Recycling the rig will reduce the company's owned fleet to four modern South Korea-built semi-submersible drilling rigs - the Deepsea Nodkapp, the Deepsea Aberdeen, the Deepsea Stavanger, and the Deepsea Atlantic, all under contracts, with firm backlog at the end of the second quarter at $900 million.
Odfjell Drilling also manages the 2019-built CIMC Raffles owned Deepsea Yantai drilling rig, which recently struck Norway's largest gas discovery in 2020, the Dugong.
Apart from the drilling rig backlog, Odfjell's platform drilling backlog was 300 million billion at June 30, 2020, with value of priced optional periods of USD 0.9 billion.
Benefitting from modern, harsh-environment fleet
In its quarterly presentation on Thursday, Odfjell Drilling acknowledged the COVID-19 outbreak and the drop in the oil price, have increased the uncertainty within the offshore drilling market.
The company said it expected the overall global utilization of offshore drilling rigs to remain at low levels especially with ultra-deep and benign water operations, but it felt it was in a good spot with its own fleet.
"We believe that the utilization of the modern harsh environment drilling fleet will remain at high levels going forward...Odfjell Drilling is benefiting from having a modern fleet, primarily consisting of high-end harsh environment 6th generation units with strategic frame agreements with Equinor and AkerBP, in addition, to close relations with BP and Total.
"Despite the uncertain demand for drilling services, we believe our Group is well-positioned to add more backlog in these challenging times due to our operational track record, strong client relationships combined with a healthy financial balance sheet."
Apart from exuding confidence in securing further offshore drilling work - something not heard every day in the offshore drilling space these days especially following bankruptcies of Diamond, Noble, and Valaris - Odfjell Drilling on Thursday also raised eyebrows by announcing something else not typical for an offshore drilling contractor - the entry into the offshore wind space.
Namely, Odfjell Drilling has decided to invest and become a strategic partner in OceanWind, a company whose aim is to become a major player in the harsh environment floating wind market.
Odfjell Drilling sees an opportunity here saying that offshore wind may be used as the main energy source to an offshore drilling operation, "enabling Odfjell Drilling to deliver energy-efficient drilling services and thereby contributing to the clients’ and Odfjell Drilling’s emissions targets."