New rig contracts signed

The Bideford Dolphin rig has won a three-year contract with start-up from 27 January 2011. The contract is worth about USD 421 million. Statoil has an option to extend the contract from three to four years by 1 November 2010. The value of the contract will then increase to about USD 553 million. Dolphin AS is a wholly-owned subsidiary of Fred Olsen Energy ASA.

Seadrill’s West Epsilon rig has been awarded a letter of intent for a four-year contract to take effect on 29 December 2010. This contract is worth about USD 394 million. The agreement is conditional on partner approval. Statoil can extend the contract period to five or six years before 1 October 2010. There will also be an option to extend the contract for an additional two years.

Both rigs are working for Statoil at present.

“We have great expectations that these rigs will continue their improvement efforts in health, safety and the environment and in drilling operations,” says Geir Slora, senior vice president for drilling and wells in Exploration & Production Norway.

Before the global economic problems took full effect Statoil found that the rig rates had increased too much, and they did not decrease correspondingly when the market circumstances changed. Anders Opedal, senior vice president for procurement in Projects & Procurement, says that the rig rates are now at a more sustainable level.

“We see that the cost level for rig charter is better adapted to the current market situation and we look forward to continuing cooperation with the two rigs,” says Opedal.

“They will play an important part in helping us reach out production targets for the NCS in the next few years.”