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Another $multi-billion package for Songa Offshore

Another $multi-billion package for Songa Offshore
Statoil is raising its mature fields game on the Norwegian Continental Shelf by deciding to long-term charter two further new-build rigs designed and built for the purpose.

Statoil is raising its mature fields game on the Norwegian Continental Shelf by deciding to long-term charter two further new-build rigs designed and built for the purpose.

The eight-year core contracts are together worth $2.66billion to Songa Offshore, which will build and run the so-called “Category D” rigs. They are to be constructed by DSME (Daewoo) of South Korea.

This order is in effect a carbon-copy of the one placed with Songa last summer and will bring the Category D fleet up to four units.

The latest contracts have options to extend the charter period by 4×3 years . . . in other words up to a further 12 years per rig.

This programme is hugely significant for the NCS as it demonstrates Statoil’s ongoing confidence in the future of the Norwegian sector and its ability to map out the future in a manner so far not applied in the UK oil-patch where ownership of licences and assets is far more fragmented.

Statoil developed the category D design for work in 100-500m water depths and to drill to 8,500m. These mature field workhorses will primarily be used for drilling of production wells and well completion. The objective is to maximise oil and gas recovery. The first two rigs are planned to be in operation from 2014 and the two following from 2015.

VP of development and production for Norway, Oystein Michelsen said of the programme: “We have a world-class project portfolio on the NCS with a robust production outlook. In addition to the safe and efficient development of new fields, we continue to step up our efforts to improve recovery from existing fields.

“We are convinced that new efforts are needed to secure a rig fleet that can handle the demanding tasks ahead.

“By increasing the capacity of category D rigs, the drilling and completion of production wells will be carried out at lower costs, more efficiently and in a safe manner.

“Reducing rig costs is important in order to realise the values in existing discoveries. New discoveries are often made close to existing fields. Fast development of such discoveries is necessary to utilise the existing infrastructure.”

One of the new category D rigs will be used on the Norne, Heidrun and Åsgård licences, the other will be part of Statoil’s strategic rig fleet and set up for year-round operations in the Barents Sea.

Statoil will provide to Songa Offshore a bridge financing covering the pre-delivery payment by the drilling company to the shipyard.

The financing is equivalent to 20% of the total construction contracts value, offered at normal market conditions, including security.

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