Odfjell Drilling secures more North Sea work for its rig

Norwegian offshore drilling contractor Odfjell Drilling has inked two letters of intent (LOIs) with an undisclosed client for one of its semi-submersible rigs to carry out drilling activities in the North Sea.

Odfjell Drilling reported on Friday, 31 March 2023, that it had signed two LOIs with a combined firm duration of 23 months for the Deepsea Atlantic semi-submersible rig to conduct operations in the North Sea region.

These LOIs have a value of approximately $290 million, excluding integrated services, upgrades/modifications or mobilisation fees. In addition to the base value, the signed deals also include provisions for performance bonuses and fuel incentives.

Kjetil Gjersdal, Chief Executive Officer of Odfjell Drilling, commented: “In the year of our 50th anniversary these LOIs are testament to Odfjell Drilling’s experience and continued drive to innovate and remain at the forefront of change in our industry.

“While providing valuable, continuous and lengthy backlog these contracts are also a platform for us to take the next step in terms of automation, digitalisation and carbon reduction together with our valued client.”

According to Odfjell Drilling, there are four priced one-well options, following the firm period and the arrangement also provides for three further optional periods of approximately one-year each with the rates for each period to be mutually agreed before exercising the option.

Furthermore, the offshore drilling contractor explains that the LOIs are contingent on license approval while one of the LOIs is also contingent on governmental approval and formalisation of the contract. The work is expected to start consecutively, following the completion of the Special Periodic Survey, currently planned during the first half of 2024.

“Over the last decade, the Deepsea Atlantic has proven itself to be one of the most efficient ‘well factories’ in the harsh environment segment. We intend to build on this impressive track record and set a new efficiency benchmark for the industry to chase,” added Gjersdal.

Currently, the rig is working for Equinor thanks to a letter of intent, which was awarded in July 2022 for the drilling of 12 wells, as part of Phase 2 of the Johan Sverdrup field development in Norway. In November 2022, the Norwegian state-owned oil and gas player extended the rig’s stay offshore Norway until the first quarter of 2024 with five additional wells on the Johan Sverdrup Phase 2 development.

The 2009-built Deepsea Atlantic is a sixth-generation deepwater and harsh environment semi-submersible, dual derrick, dynamic-positioned rig of enhanced GVA 7500 design.