Danish offshore drilling company Maersk Drilling has won an 11-month contract extension for its jack-up drilling rig Maersk Intrepid with Equinor in Norway, which will see the drilling firm earn more than $100 million.
Maersk Drilling said Thursday the four-well extension would see the jack-up rig continue working for Equinor at the Martin Linge offshore development.
"In direct continuation of the rig’s current workscope at the Martin Linge field, Maersk Intrepid will be assigned to drill and complete three additional gas wells at Martin Linge, followed by the plugging and abandonment of one well," Maersk Drilling said.
The contract extension is expected to start in September 2020, with an estimated duration of 339 days, which will keep the rig deployed into the second half of 2021.
In addition, Maersk Drilling and Equinor have reached an agreement on the provision of integrated services for the campaign, including Managed Pressure Drilling, slop treatment, cuttings handling, and tubular running services.
$100 million + integrated services and bonus + exclusivity
The contract value is approximately $100m, including rig modifications and upgrades, but excluding the integrated services provided and potential performance bonuses. The contract includes an additional one-well option, plus the option of adding up to 120 additional days of well intervention.
The contract extension is agreed as part of a new Master Framework Agreement between Equinor and Maersk Drilling.
The drilling company said the agreement was aimed at "facilitating long-term collaboration in Norway and internationally."
In the Master Framework Agreement, the parties commit to collaborate on technology advancements with a focus on digitalization and automation, as well as further initiatives to limit greenhouse gas emissions from drilling operations. Further, the agreement lays out a general framework for the delivery of integrated services.
As part of the agreement, Equinor has designated Maersk Intrepid as a preferred jack-up rig, with exclusive access to the rig if certain conditions are met.
CEO Jørn Madsen of Maersk Drilling: "In light of the current market situation, it’s even more important to maintain our strategic focus on driving value for our customers by enhancing efficiency through better planning, execution, and orchestration of drilling campaigns, while also making additional investments to limit emissions from drilling. This resonates well with Equinor’s focus on cost efficiency and responsible, low-emission drilling, and we look forward to immediately starting preparations for a successful ‘one team’ drilling operation along with Equinor and the other suppliers designated for the campaign."
Low emission rig
During Maersk Intrepid’s previously agreed work scope, Maersk Drilling will complete a series of upgrades to turn it into the first hybrid, low-emission rig. These upgrades combine the use of hybrid power with low levels of NOx emissions, adding data intelligence to further reduce energy consumption and CO2 emissions. The project is supported by a grant from the Norwegian NOx Fund, and by Equinor’s decision to introduce compensation formats to stimulate emission reductions.
In addition to the hybrid power and low-emission upgrades, Maersk Intrepid will be outfitted with the NOVOS drilling system, further enhancing the rig’s digital profile. The system assists the driller in executing processes consistently and enables interfacing with third-party advisory algorithms to enhance drilling performance.
Maersk Intrepid is an ultra-harsh environment CJ70 jack-up rig, designed for year-round operations in the North Sea. It was delivered in 2014 and has been operating in Norway ever since.