Odfjell Drilling's Offshore Rig Secures $138M Contract Extension with Equinor

Credit: Equinor (File image)
Credit: Equinor (File image)

Norwegian offshore drilling firm Odfjell Drilling said Thursday that Equinor had exercised options for seven wells to extend the use of its Deepsea Aberdeen offshore drilling rig on the Breidablikk field in the North Sea, offshore Norway.

The exercised options are planned to start in mid-Q1 2025 in direct continuation of the current firm period and extend the firm backlog on the Deepsea Aberdeen rig and last until the end of the fourth quarter of 2025. 

The options have a value of approximately USD 138 million, excluding integrated services, performance, and fuel incentives.

In addition to the exercised wells, the contract now includes further optional periods, which, if exercised, could keep the Deepsea Aberdeen rig contracted to 2029. 

Such optional periods consist of six optional wells, followed by three further optional periods of eight wells each, or approximately three times one-year. The rates for all such optional periods are to be mutually agreed prior to exercising, Odfjell Drilling said.

Kjetil Gjersdal, Chief Executive Officer of Odfjell Drilling AS commented: “We are pleased to confirm this extension which will see the Deepsea Aberdeen continue its work with Equinor on the Breidablikk field. We look forward to building on the successful collaboration with Equinor which has seen the Deepsea Aberdeen drill the initial Breidablikk wells ahead of schedule, paving the way for early production on the field. The One Team approach with its focus on safe, low-carbon, cost-effective wells has proven yet again to deliver impressive results.

“With the exercised optional wells Odfjell Drilling will see substantial cash flow earlier than forecasted as the rig moves to a higher day rate level. The extension mechanisms now agreed could see the Deepsea Aberdeen remain in continuous operation with Equinor until 2029, delivering strong, predictable cash generation from the unit.”

Equinor brought online the Breidablikk field in October, four months ahead of schedule. Tied back to the Grane platform, the subsea field holds almost 200 million barrels of recoverable oil. The partners are Equinor (operator), Petoro, Vår Energi, and ConocoPhillips.

"When the plan for development and operation (PDO) was submitted in September 2020, production from Breidablikk was scheduled to start in the first half of 2024, with predrilling and completion of five wells. Now, eight wells have already been drilled, and the drilling of additional wells will continue on the field until the end of 2025," Equinor said on October 20, 2023.

Breidablikk is being developed with 22 subsea wells drilled from four templates. Pipelines and cables have been installed between the subsea facility and the Grane platform, which has been modified to receive the well stream.

Breidablikk is expected to produce at plateau level in the period 2024 to 2026. Plateau production is estimated at gross 55-60,000 kboepd.  

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