Valaris Nets 540-Day Offshore Drilling Deal with Equinor in Brazil

Norwegian oil and gas company Equinor has awarded the drilling contractor Valaris a 540-day drilling contract for the Valaris DS-17 drillship. The offshore drilling contract is for operations in Brazil and is scheduled to start in 2023.

Under the contract awarded by Equinor on behalf of the Bacalhau license partners, the Valaris DS-17 drillship will drill an appraisal well, plug an old exploration well and conduct additional drilling scope in Brazil.

Partners in Bacalhau are Equinor 40% (operator), ExxonMobil 40%, Petrogal Brasil 20% and Pré-sal Petróleo SA (production sharing agreement manager, not an investor).

Geir Tungesvik, executive vice president for Projects, Drilling and Procurement said: "Brazil is one of Equinor’s core areas, and Bacalhau is one of our flagship projects internationally. We are pleased to land an agreement with the Valaris, on deliveries from an advanced drillship for this important field. We look forward to working with one of the world’s largest rig contractors and we have high expectations to their deliveries on safety and efficiency."

The total contract value is around $327 million, including an upfront payment totaling approximately $86 million for mobilization costs, a contribution towards reactivation costs and capital upgrades. The remaining contract value relates to the operating day rate and additional services, including managed pressure drilling (MPD), remote operating vehicle (ROV), casing running, slop treatment and cuttings handling. A fuel reduction incentive has also been agreed on.

"The second rig in Bacalhau will expand our drilling capacity in Brazil and will further enhance our understanding of Bacalhau North through an ADR (Reservoir Data Acquisition) well. The decision to bring in DS-17 demonstrates our commitment to create value in Brazil, where we have a long-term presence perspective,” says Veronica Rezende Coelho, Equinor's country manager in Brazil. 

The Valaris DS-17 is an ultra-deepwater drillship, capable of operating in water depths of more than 3600 meters.