Statoil extends rig suspensions

Statoil ASA has elected to extend the suspensions of the COSL Pioneer, Scarabeo 5, and Songa Trym drilling rigs for additional 7.5, 1.5, and 1-month periods, respectively.

The extension period for Songa Trym may be reduced, or avoided, if acceleration of activities is achieved, the company says.

Statoil initially suspended the rigs from Oct. 8, Oct. 5, and Nov. 20, respectively, until yearend due to overcapacity in the company’s rig portfolio and the inability to mature alternative assignments for the rigs (OGJ Online, Sept. 17, 2014; Nov. 6, 2014).

Statoil at the time also suspended the Transocean Spitsbergen rig. The company later canceled its Stena Carron rig contract after fulfilling work commitments on Blocks 38 and 39 of the Kwanza basin offshore Angola (OGJ Online, Nov. 21, 2014).

“When the rig contracts were signed it was challenging to ensure sufficient rig capacity,” explained Jon Arnt Jacobsen, Statoil procurement head. “Today the activity is facing lower margins, a generally high cost level, and subsequent lower profitability. It is therefore more demanding to mature profitable drilling targets.”

Jacobsen said, “I would like to emphasize that the suspensions are not related to the rig deliveries. We are very pleased with the work they have done for us. These measures are necessary due to the overcapacity of rigs compared to the assignments we are prioritizing. This situation is unfortunate, and we are doing what we can to minimize the extent of the suspensions.”

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