Equinor awards ‘biggest ever’ drilling and well service contracts

World’s largest oilfield services providers Schlumberger, Halliburton, and Baker Hughes have been awarded $3,67 billion worth of contracts for integrated drilling and well services on most of the Equinor-operated fields on the Norwegian continental shelf.

Initially awarded for four years, the contracts have a total estimated value of some NOK 30 billion. The contracts include options for five 2-year extensions. Extension of the contracts is subject to continuous achievement of the goals for well deliveries, Equinor said on Monday.

Pål Eitrheim, Statoil’s chief procurement officer: “This is a great day for Equinor and the Norwegian continental shelf. The contracts are the biggest we have ever awarded within drilling and well service. The integrated delivery model we have chosen will strengthen the interaction between the service supplier, rig supplier, and operator, enabling us to drill more wells. This, in turn, will enhance recovery and ensure long-term operations.”

The purpose of integrated drilling and well services is to clarify roles and responsibilities. This results in fewer interfaces and more clearly defined responsibilities, facilitating more seamless planning and implementation of the operations between the various contributors, Equinor said.

Geir Tungesvik, senior vice president, drilling & well: “The collaboration model has already been tested out for Johan Sverdrup Phase 1, Aasta Hansteen, Mariner and the Askeladd and Askepott Cat J rigs with very good safety and efficiency results.

2000 jobs

According to Equinor, the new contracts will create jobs for some 2000 people on 17 fixed platforms and eight mobile rigs. They replace the current service contracts, which expire on 31 August. The contracts aim at new ways of collaborating, giving the service suppliers greater responsibility for services than before.

Support from land will be essential to successful implementation of integrated operations. For mobile units the service contracts will be linked to the rig rather than the various licenses, Equinor highlighted.

“The service supplier, rig supplier and Equinor will collaborate as a team, and together decide how to best solve the tasks. We have common drivers to help us achieve our aims, and we are willing to reward good performance because it helps us increase profitability. The principle of the collaboration model is to always operate according to best practice, learn across operations and leverage lessons learned for continuous improvement,” says Tungesvik.

The contracts include the following services for well construction: Integrated drilling services; Cementation and pumping; Drilling and completion fluids; Electrical logging; Completion