Overcapacity causes Statoil to suspend two rigs

Statoil ASA will suspend the Transocean Spitsbergen and Songa Trym drilling rigs for the remainder of the year—and may choose to extend the suspension beyond that period—following completion of work in mid-November because of overcapacity in its rig portfolio.

Transocean Spitsbergen, part of the company’s 2014 Barents Sea exploration program that’s nearing completion, will complete the Saturn well and then cut and retrieve a wellhead in the Mercury exploration well before suspension (OGJ Online, Aug. 7, 2014).

A yard stay is planned beginning Jan. 1. Statoil says it was unable to find alternative assignments for the rig, which is under contract to the company until the start of next year’s third quarter.

“Transocean Spitsbergen drilled the last seven wells 40% faster than the industrial average in the Barents Sea,” commented Jon Arnt Jacobsen, Statoil’s chief procurement officer. “This allowed two more wells than originally planned to be drilled.”

A busy year for the rig included the illegal boarding of environmental activists from Greenpeace as it was en route to the Hoop area of the Barents Sea in May (OGJ Online, May 29, 2014).

Songa Trym will be suspended after the rig completes plugging a well on Oseberg field in the North Sea (OGJ, Feb. 3, 2014, p. 76).

“Unfortunately we are now in a situation of overcapacity, at the same time as the industry is facing high costs and lower profitability,” Jacobsen explained. “We are now together with our partners maturing identified drilling assignments for both rigs for 2015.”

Following the suspensions, Statoil will have 13 rigs operating on the Norwegian continental shelf.