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Transocean wins with new contracts from Norway's Statoil

Statoil says new drilling efforts in the North Sea show there's still plenty of life left in the region.

By Daniel J. Graeber
Transocean wins with new contracts from Norway's Statoil
Statoil hires Transocean for drilling campaigns in British and Norwegian waters -- which the company says makes clear that British waters have a long drilling life ahead of them -- just as rival rig company Seadrill flirts with bankruptcy. File photo by A.J. Sisco/UPI. | License Photo

April 4 (UPI) -- After awarding new contracts to rig company Transocean for the North Sea, Norwegian energy company Statoil said British waters still have a long life of ahead.

Statoil and its partners working in the British offshore license areas contracted Transocean for use of its Spitsbergen rig for three exploration wells and six production wells.

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"We believe that the British continental shelf still presents exciting opportunities," Jenny Morris, Statoil's vice president in charge of regional offshore exploration, said in a statement. "Securing this rig will enable us to fulfill our exploration ambitions of testing potential along the underexplored margins and more mature areas of the basin, in addition to near-field potential at Mariner."

Statoil started work in the Mariner basin in the British waters of the North Sea last year, working alongside British energy company BP, which plans to drill up to five exploration wells over the next 18 months and 50 development wells over the next three to four years.

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Statoil said Mariner holds an estimated 250 billion barrels of oil and peak production should be around 55,000 barrels of oil per day, with first oil expected in production by next year. The contract value for the combined services in the British North Sea, which extend beyond Mariner into Norwegian waters, is more than $100 million.

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The maturation of some of the basins in the North Sea has prompted some companies to shift strategies. BP this week said it was selling off some of its legacy holdings as it reconfigures its regional operations by parting ways with a pipeline system tied to Forties crude oil, a component of the Brent basket.

For companies servicing exploration and production like Transocean, it's an indication of which players successfully navigated last year's market downturn. Transocean cut some of the rates it charges to lease its rigs after seeing dozens of contracts cancelled. Fourth quarter revenue of $974 million represented a 7.5 percent gain from the previous term and CEO Jeremy Thigpen said there's been a "steady flow of customer inquiries."

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Rival companies are not as fortunate as struggling rig company Seadrill offers more hints of bankruptcy. The company, which is based in Norway, said in February it wasn't expecting signs of recovery in 2017. In a statement Tuesday, the company said it was preparing to fold its tent.

"We expect the implementation of a comprehensive restructuring plan will likely involve schemes of arrangement or Chapter 11 proceedings, and we are preparing accordingly," it stated.

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