KCA Deutag, one of the world’s leading international drilling and engineering contractors, announces the award of a contract with Statoil for the management, operation and maintenance of two Category J jack-up rigs which will operate on the Norwegian Continental Shelf (NCS). The contract is for an initial period of 8 years with the option to extend by 4 further periods of 3 years, meaning the Contract could potentially last for up to 20 years. The Contract value is of the order of NOK 5.2billion (USD 900million) for the initial period, and NOK 12.8billion (USD 2.2billion) including options.
Norrie McKay, CEO at KCA Deutag, said; “We are delighted to announce this significant award from Statoil. Alongside our existing operations, this will spearhead our strategy to become the leading drilling contractor on the Norwegian Continental Shelf. This award enhances our already significant business in Norway and also sets a precedent for KCA Deutag to target further drilling operations and management contracts on newbuild mobile offshore drilling units that are third-party owned.”
KCA Deutag will also be responsible for providing operations input into engineering design and supervising the construction of the Category J jack-up rigs. Each tailor-made rig will be owned by the Gullfaks and Oseberg licences and be specifically designed to operate on both surface and subsea wells.
This contract adopts an innovative approach where a mobile offshore drilling unit is owned by the Licenses instead of the drilling contractor and supports Statoil’s goal of ensuring the strategic rig supply required to address their long-term drilling requirements. KCA Deutag also operates eight other platform drilling rigs for Statoil on the NCS. Today’s award builds upon a productive working relationship with Statoil that spans almost 30 years.
During the initial engineering and construction phases, a joint Statoil and KCA Deutag team will be working alongside contractors Samsung Heavy Industries (SHI) and National Oilwell Varco (NOV) at the shipyard. This will involve the relocation of key personnel to South Korea to provide input during the initial engineering stages of the project. SHI will be the rig builder and NOV will provide the major drilling components.
Rune Lorentzen, Chairman for KCA Deutag Drilling Norge, said; “This is a key milestone for KCA Deutag. Today’s contract award extends a long standing and productive working relationship with Statoil and recognises our efforts to deliver continuous improvement and value to our Clients. Our vision is to be the preferred drilling contractor through measurable performance improvement and providing safe, effective and trouble-free operations.
“We employ more than 1,000 people at KCA Deutag Norway and will provide substantial resources to ensure a successful start-up. This is a bold new chapter for all companies involved. We are excited about the prospects ahead.”