Drilling contractors stacking rigs

May 1, 2020
As the low oil price and coronavirus pandemic have forced operators to cut budgets and cancel contracts, drilling contractors have started stacking and retiring rigs.

As the low oil price and coronavirus pandemic have forced operators to cut budgets and cancel contracts, drilling contractors have started stacking and retiring rigs. As of this writing, Noble Corp. has cold-stacked the drillship Noble Bully II and the semisubmersible Noble Paul Romano; and warm-stacked the jackups Noble Sam Hartley, Noble Sam Turner, and Noble Hans Deul. In addition, the drilling contractor will retire the 1981-built jackup Noble Joe Beall.

Transocean Ltd. has stacked the semisubs Henry Goodrich and Transocean 712.

Shelf Drilling has stacked the jackups Galveston Key and Key Hawaii.

Shell, BP retain North Sea FPSOs

Teekay Corp. has entered into a new bareboat charter contract with Britoil Ltd., a BP subsidiary, for the FPSO Petrojarl Foinaven for up to about 10 years. The FPSO has operated at the Foinaven field west of Shetland since 1997.

Under the terms of the contract, Teekay is expected to receive an upfront payment of about $67 million in cash, a nominal per day rate over the life of the contract, and a lump-sum payment at the end of the contract period, which is expected to cover the costs of recycling the FPSO unit in accordance with the EU Ship Recycling Regulations.

As part of the transaction, Teekay Offshore Partners L.P., now known as Altera Infrastructure L.P. has entered into agreements with BP directly to provide the operations and shuttle tanker services for the FPSO.

Altera Infrastructure subsidiary Teekay Knarr has agreed to a contract amendment with AS Norske Shell concerning the Knarr field in the Norwegian North Sea. The contract for lease and operation of the FPSO Petrojarl Knarr, which has operated on the field since 2015, will now run until at least March 2022.

Original duration of the firm contract period had been until March 2021. Under the amendment, there will be a reduction in the day rate from March 2021 to March 2022 and the fee payable by the operator if the contract were not extended has been waived.

In return, Shell has agreed to the introduction of an additional production volume and oil price-related tariff. The amendment also provides for a mutual right to terminate the contract on six months’ notice without payment of penalty, the termination not being effective before March 2022.

Solstad to restructure, reduce fleet

Solstad Offshore has reached agreement with a majority of its stakeholders on a restructuring of the company.

Key terms include:

  • Around NOK10 billion ($959 million) of debt (secured debt, leasing obligations, bond obligations and others) to be converted to equity.
  • The group’s balance sheet and liquidity to be strengthened.
  • The offshore service/construction/platform supply vessel fleet to be rationalized, with 37 older vessels likely to be sold or scrapped, with the long-term business based on a core fleet of around 90 vessels.
  • Termination agreements in respect of the leasing agreements for the five vessels owned by subsidiaries of SFL Corp, and new leasing agreements on amended terms for two vessels owned by a subsidiary of Ocean Yield, F-Shiplease.

CEO Lars Peder Solstad said: “We are entering a period where global offshore activity is likely to be reduced with the impact of the COVID-19 virus and the drop in the oil price. A successful implementation of the restructuring will enable the company to better meet the challenges of the current markets and position the company well for the coming years.”

Silver Eagle orders jackups

Bahrain-based Silver Eagle Global has contracted PetroVietnam Marine Shipyard to build two self-elevating drilling units (SEDU). Based on the Levingston/MiNO Enhanced 430WC-4 design, the new series will have what Silver Eagle claims is the industry’s largest deck area and deck load capacity, a cantilever with modular design, and a high-speed jacking system. The self-propelled design is said to be capable of working at greater water depths and in harsh environments.

 ABS will provide classification for the series.

Matthew Tremblay, senior vice president, Global Offshore, ABS, said: “These unique units offer the flexibility to adapt to the mission and payload. The large deck and cantilever are innovative design features, while self-propulsion and the four legs allows the vessel to get on the job site independently. These unique design features of the Silver Eagle units will bring a new level of versatility for the offshore industry.”

Silver Eagle, which is associated with Rawabi Holding of Saudi Arabia, has also entered into a master service arrangement with Baker Hughes. •

About the Author

Jessica Stump | Editor

Jessica Stump is editor of Offshore Magazine. She uploads and writes news to the website, assembles surveys and electronic newsletters, and writes and edits articles for the magazine. She was the summer editorial intern at Offshore in 2009 and 2010 before joining full time in April 2011. She has a journalism degree from Texas Tech University.