Shell cancels contract for one of its Arctic rigs

Noble Corporation, an offshore drilling contractor, has received a contract termination for one of its rigs from an oil major Royal Dutch Shell. 

According to Noble’s latest fleet status report, Shell has terminated the contract for the drillship Noble Discoverer “for convenience” and will pay Noble for the remaining term at approximately 90% of the operating dayrate adjusted for certain other items.

Shell used the Noble Discoverer for its Arctic drilling operations alongside the Transocean’s semi-submersible drilling rig Polar Pioneer.

After failing to find sufficient oil and gas quantities at its offshore Alaska exploration well, Shell decided in September to abandon the well saying it would cease further exploration activity in offshore Alaska for the foreseeable future.

The rig is being mobilized to Singapore where it is expected to be stacked, Noble said. The contract with Shell was previously expected to run through late-December 2016. The drillship was operating under a dayrate of $369,000.

Two drillships stay with Freeport-McMoRan

In its fleet report, Noble noted that two of its drillships, the Noble Sam Croft and Noble Tom Madden, remain under contract with Freeport-McMoRan even though the oil and gas company recently announced it would reduce the number of the rigs it was using in the U.S. Gulf of Mexico in order to further reduce costs.

Saudi Aramco contracts

Furthermore, Noble said that contract rates for four of its jack-up drilling rigs under contracts with Saudi Aramco in Saudi Arabia were adjusted downward for 2015. Currently, the remaining four contracts reflect a return to the original contract rates. However, Noble said, given the current market conditions and based on the discussions with the customer, Noble does not expect the rates to return to the original contract rates in 2016. Instead, Noble added, the company expects the contract rates to be in the general range of the amended rates for 2015.

Namely, the dayrates for four jack-ups, Noble Scott Marks, Noble Roger Lewis, Noble Joe Beall and Noble Gene House in 2015 were $169,000 for the first two and $65,000 for the second two rigs.

Offshore Energy Today Staff