Statoil suspends another rig on ‘overcapacity’

Norwegian oil giant Statoil will lay up the COSL Pioneer semi-submersible drilling rig in the fourth quarter of 2014, “due to overcapacity in our rig portfolio.”

The rig is currently carrying out an assignment on the Visund field and is scheduled to complete this work at the end of September.

“After a careful review of our drilling plan, we find it necessary to suspend COSL Pioneer for the time being,” says Tore Aarreberg, in charge of rig procurement.

In the beginning of July Statoil also announced that the semi-submersible drilling rig Scarabeo 5 will be temporarily suspended. Scarabeo 5 will be taken out of operations at the end of September, for the rest of the year.

“At the moment we have three rigs contracted from COSL Drilling Europe. Our offshore organisation enjoys excellent cooperation with the contractor’s drilling teams, and COSL Pioneer has demonstrated consistent, high efficiency in drilling operations. We are in close dialogue with the contractor concerning how the suspension of the rig will be implemented in practice, and we continue to look forward to many years of cooperation with COSL on the Norwegian shelf.”

The rig is contracted until 2016 and will be used for drilling and completion of production wells on the Norwegian continental shelf.

COSL Pioneer being taken out of operation for a shorter period will have no impact on Statoil’s production targets or planned exploration activity on the Norwegian shelf, the oil company has said.

Statoil has said it will still be drilling 20-25 exploration wells on the Norwegian shelf in 2014, where it operates about 2/3 of all wells.

Ocean Vanguard dispute

To remind, Statoil in June terminated a contract with Diamond Offshore for the Ocean Vanguard semi-submersible drilling rig, earlier that the original contract specified, citing “technical aspects of the rig.”

The Houston-based drilling contractor has disputed the decision by the oil company saying in June: ““Diamond Offshore disputes Statoil’s basis for terminating the contract and intends to defend its rights under the drilling contract.” 

The Ocean Vanguard contract provided for a dayrate of approximately $454,000 and was estimated to conclude in accordance with its terms in late February 2015.