Aquadrill drillship lands one-year gig in Gulf of Mexico

Offshore drilling contractor Aquadrill, formerly known as Seadrill Partners, has entered into a charter hire agreement with a subsidiary of Diamond Offshore Drilling (the manager) to provide the Auriga drillship for operations in the U.S. Gulf of Mexico.

Namely, Diamond Offshore is acting as the manager for two Aquadrill’s rigs, the 2013-built Auriga drillship and the 2011-built Capricorn semi-submersible rig. Other rig managers for Aquadrill include Vantage Drilling, Seadrill Limited, Odfjell Drilling, and Energy Drilling, according to Aquadrill’s fleet status report from July 2021.

According to Aquadrill’s update said last week, the charter hire agreement is for a one-year drilling contract plus a one-year mutually agreed option. The charter hire agreement will be extended if the parties mutually agree to exercise the optional term.

The terms of the charter hire agreement are consistent with the current management services agreements in place between the company and the manager. Further, the resulting financial benefits are as if the company had entered into the drilling contract directly, Aquadrill explained without revealing further details.

The Auriga drillship will be upgraded with managed pressure drilling capabilities ahead of its new drilling contract associated with the charter hire agreement.

The total contract value for the firm portion of the drilling contract is expected to be $94 million and the beginning of the contract is expected in February 2022 following reactivation, upgrade, contract preparation, and system integration testing.

Former Seadrill Partners, which was an asset-holding unit of Seadrill Limited, emerged from bankruptcy in May 2021 after filing for it in December 2020. As part of the plan, new management services agreements were entered into for the management of the company’s offshore drilling units and a transition services agreement was agreed to with Seadrill Partners’ prior manager.

Following its exit from bankruptcy, Seadrill Partners’ new name was revealed in July this year when the rig owner secured a contract with Equinor for the Vela drillship for operations in the U.S. Gulf of Mexico.

Later that same month, Aquadrill Offshore lost in arbitration against BP related to claims for breach of an offshore drilling contract. Aquadrill said at the time it was evaluating the tribunal’s ruling and considering its options, including its right to appeal.

Namely, the International Arbitration Tribunal in the matter of various Aquadrill subsidiaries versus BP Exploration and Production decided that Aquadrill’s claims for breach of contract and related requests for relief and damages were denied in full.