Another rig deal for COSL as exploration activity heats up off Norway

Norwegian oil and gas player Vår Energi has picked a sixth-generation semi-submersible rig from COSL Offshore Management, part of COSL Drilling Europe, for drilling operations in the Barents Sea with the aim of ramping up the search for more hydrocarbons in this area offshore Norway.

The new two-year contract with Vår Energi will enable COSL Drilling Europe to deploy its COSL Prospector rig in the Barents Sea. This deal, which is due to start in the third quarter of 2024, comes with three years of options, resulting in a maximum duration of five years. The 2014-built COSL Prospector rig is of GG5000 design and can operate in water depths up to 1,500 meters and drilling depths to 7,500 meters.

Frank Tollefsen, CEO & President of COSL Drilling Europe, commented: “Vår Energi shares our ambition to deliver on the energy transition. We are very satisfied with the opportunity to provide our safe, efficient, and low-emission rigs, and with COSL Prospector as our fourth rig, we are well-positioned as a solid player on the Norwegian Continental shelf.

“We will use this position to set a new market standard in terms of efficient drilling operations. We are looking forward to expanding our partnership through a long-term strategic alliance. This gives a solid base to develop the drilling operations for the future.”

In line with the Norwegian Petroleum Directorate’s view on the Barents Sea’s hydrocarbon potential, Vår Energi sees substantial opportunities for further growth and value creation in the north, thus, it secured the COSL Prospector rig for its drilling programme in the Barents region, in cooperation with Equinor. The rig contract with COSL Offshore Management builds on cooperation between Vår Energi and Equinor that will secure access for the companies to this rig for the period 2024-2026.

Torger Rød, Vår Energi’s CEO, remarked: “We see great opportunities for growth and value creation in the Barents Sea. At the same time, the lack of infrastructure, particularly for gas, poses restrictions for further development in the region.

“That’s why exploration is essential to uncover new oil and gas resources that can form the basis for new infrastructure and the development of existing and future discoveries. We are now gearing up activity in the region, including securing a dedicated drilling rig for continuous drilling operations in the coming years.”

Furthermore, Vår Energi intends to drill exploration and appraisal wells, along with certain production wells, over a two-year period starting from the last half of 2024. The objective is two-fold and covers the identification of additional petroleum resources near Goliat and Johan Castberg for maximum value creation and utilisation of existing infrastructure, and targeted exploration for new gas resources that can lead to developing new gas export infrastructure.

The Norwegian player highlights that it sees the Barents region as an important strategic priority area. According to the NPD, the Barents Sea’s resource potential is significant and the region could help maintain secure, reliable energy deliveries to Europe in the coming decades.  

Bearing this in mind, Vår Energi is intensifying its efforts to find export solutions for proven gas resources that can trigger high levels of activity and value creation in the region. Earlier this year, Gassco concluded that a pipeline solution from the Barents Sea, via Hammerfest and the establishment of a new process facility on Melkøya, to the Norwegian Sea, has the greatest potential for realisation.

“The report points out that new infrastructure for gas can be achieved, and that this has also highlighted the need for further exploration. We’re glad that Gassco is working to realise the development of export capacity in the best interests of all concerned. Cooperation between the players and local and central authorities is the key to success,” underscored Rød.

Moreover, Vår Energi claims that the fact it is sharing a rig with Equinor yields both greater exploration activity and synergies in the form of increased resource utilisation, reduced costs, and lower emissions. The firm underlines that continuous exploration activity over several years means better predictability and ripple effects for onshore suppliers. This deal comes after Equinor hired two semi-submersible rigs from COSL for drilling operations on the NCS.

Vår Energi is also pursuing decarbonisation with offshore wind, as demonstrated by a collaboration with a consortium consisting of Odfjell Oceanwind and Source Galileo to explore opportunities for floating offshore wind through a pilot project at a field located in the Barents Sea.

Meanwhile, the company also handed out a five-year deal to Halliburton, covering drilling services related to exploration and production drilling across its portfolio on the NCS. The firm’s drilling activities are focused around four strategic hubs in the Balder/Grane area, the North Sea, the Norwegian Sea, and the Barents Sea.