Rig and drilling contract for Johan Sverdrup

Odfjell Drilling has been awarded contracts both for the Deepsea Atlantic semi-submersible rig and for drilling services on the fixed drilling unit to be installed on the Johan Sverdup field.

The rig contract includes the charter of the Deepsea Atlantic rig for three years, starting from March 2016. In addition there are six 6-months options. The rig contract has a value of slightly more than NOK 2.5 billion.

“This contract is an important milestone for the Johan Sverdrup project. We have secured an efficient rig that will help maximise values from the field on competitive terms,” says Margareth Øvrum, Statoil’s executive vice president, Technology, Projects and Drilling.

“The Deepsea Atlantic rig will drill minimum 13 pilot wells on the field prior to production start from Johan Sverdrup in late 2019. This enables us to utilise the production capacity from Johan Sverdrup as efficiently as possible,” says Øivind Reinertsen, senior vice president for the Johan Sverdrup field.

Statoil has also signed a contract with Odfjell Drilling for drilling services on the fixed drilling unit on the Johan Sverdrup field complex starting in December 2018.

This contract has an estimated value of NOK 1.85 billion, and a duration of four years, including six 1-year options. Drilling from Johan Sverdrup’s fixed installation will be supported from Odfjell Drilling’s office in Stavanger.

“Johan Sverdrup will generate great values for the whole society for more than 50 years. Odfjell Drilling will work closely with our operations organisation in Stavanger to ensure safe operations and add maximum value in the Johan Sverdrup drilling and well processes,” says Reinertsen.

The drilling rig for the Johan Sverdrup field will be built by Aibel together with Nymo in Grimstad and National Oilwell in Kristiansand. In February 2015 Odfjell Drilling was awarded a contract by Aibel for engineering support for the construction of the drilling platform.

The company will also act as consultants during the rig engineering and construction process, ensuring an efficient and safe work environment in the operations phase.

The contract is an extension of the contract for drilling on fixed installations awarded in 2012, vesting the responsibility for the Grane, Visund, Heimdal, Njord, Snorre A/B and Sleipner installations in Odfjell Drilling.

These contract awards are subject to the approval of the plan for development and operation of the Johan Sverdrup field by the Norwegian parliament in 2015.
The investment costs for phase 1 of the Johan Sverdrup development are estimated at some NOK 117 billion NOK (2015 value). Recoverable resources are projected at between 1.4 and 2.4 billion barrels of oil equivalent.

The development concept for Johan Sverdrup phase 1 will consist of four installations, including a utility and accommodation platform, a processing platform, a drilling platform and a riser platform, in addition to three subsea templates for water injection.

The platforms will be bridge-linked. The project aims at a recovery rate of 70% for Johan Sverdrup.

The Johan Sverdrup partnership consists of Statoil, Lundin Norway, Petoro, Det norske oljeselskap and Maersk Oil. The partnership has recommended Statoil as the operator of all field phases.