Daily Newsletter

17 November 2023

Daily Newsletter

17 November 2023

Equinor extends offshore rig contract with Odfjell Drilling

The exercised options for the Deepsea Aberdeen rig are scheduled to start in the mid-first quarter of 2025.

Archana Rani November 17 2023

Norwegian company Equinor has exercised options for seven wells using Odfjell Drilling’s Deepsea Aberdeen semi-submersible rig in the Breidablikk field in the North Sea.

Equinor plans to start the exercised options for using the rig in the mid-first quarter of 2025.

A continuation of the current firm period, the options are expected to ‘extend firm backlog’ on the Deepsea Aberdeen rig to the end of the fourth quarter of 2025.

Odfjell said the options have a value of around $138m. This excludes integrated services, performance and fuel incentives.

Odfjell Drilling CEO Kjetil Gjersdal said: “We look forward to building on the successful collaboration with Equinor, which has seen the Deepsea Aberdeen drill the initial Breidablikk wells ahead of schedule, paving the way for early production on the field. The One Team approach with its focus on safe, low-carbon, cost-effective wells has proven yet again to deliver impressive results.”

The contract also covers further optional periods. If exercised, these periods could keep the Deepsea Aberdeen drilling rig contracted to 2029.

Odfjell said in a press statement: “Such optional periods consist of six optional wells followed by three further optional periods of eight wells each, or approximately three times one-year. The rates for all such optional periods are to be mutually agreed prior to exercising.”

Gjersdal added: “With the exercised optional wells, Odfjell Drilling will see substantial cash flow earlier than forecasted as the rig moves to a higher day rate level.”

In 2020, Equinor signed a letter of intent with Odfjell Drilling to drill 15 wells in the Breidablikk field using the Deepsea Aberdeen rig.

The contract involved nine optional wells.

Most O&G majors have set net zero targets, but few include Scope 3 emissions

GHG emissions generated by O&G operations accounted for 15% of total energy-related emissions worldwide in 2022. A further 40% of such emissions came from the use of oil and gas for power generation, heating, vehicle fuel, and industrial processes. Only 6 companies have targets covering Scope 3 emissions. To reduce Scope 3 emissions, O&G companies are switching their products to lower-carbon sources of energy including hydrogen, LNG, biofuels, and renewables.

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