Statoil suspends two new rigs on overcapacity

Statoil suspends two new rigs on overcapacity

STAVANGER, Norway-- Statoil has decided to suspend two new rigs, Transocean Spitsbergen and Songa Trym, due to overcapacity in its rig portfolio, and unsuccessful attempts to mature alternative assignments. The rigs will be suspended through 2014, a period which might be extended.

The exploration program in the Barents Sea for 2014 is nearing completion. After Transocean Spitsbergen has completed the Saturn well, the rig will cut and retrieve a wellhead in the Mercury exploration well. The job is estimated to be finished by the middle of November. Subsequently, the rig will be suspended until the end of the year.

Bilde Jon Arnt Jacobsen, Statoil’s chief procurement officer said, "Transocean Spitsbergen drilled the last seven wells 40% faster than the industrial average in the Barents Sea. This allowed two more wells than originally planned to be drilled. We are very pleased with the work performed for us by Transocean. Unfortunately, we are now in a situation of overcapacity, at the same time as the industry is facing high costs and lower profitability."

Transocean Spitsbergen is planning a yard stay from Jan. 1, 2015. The rig is under contract to Statoil until the start of the third quarter of 2015.

Meanwhile, Songa Trym will be suspended after the rig has completed plugging a well on the Oseberg field in the North Sea. This job is scheduled to be completed in the middle of November.

"Songa Trym has delivered well on efficiency and safety, and we would have liked to use the rig also for the rest of the year. We have tried to find new assignments for the rig, but our attempts to realize the identified options have not been successful. We are now together with our partners maturing identified drilling assignments for both rigs for 2015," adds Jacobsen.

After the two rigs are suspended, Statoil will have 15 active rigs on the Norwegian Continental Shelf.