SFL Corporation has signed an offshore drilling contract in Canada with a subsidiary of the Norwegian oil firm Equinor for the harsh environment semi-submersible rig Hercules. The estimated contract value is approximately $100 million.
The contract is for one firm well plus one optional well, and is expected to start in the second quarter of 2024.
The duration for the firm contract period is approximately 200 days including transit to and from Canada. Odfjell Drilling will manage the rig on behalf of SFL under the contract.
Hercules is currently drilling for ExxonMobil in Canada beforeit will transit to Namibia for a contract with Galp Energia, expected to start in the fourth quarter of 2023.
Ole B. Hjertaker, CEO of SFL Management AS, said: “We are pleased to sign the third contract for the Hercules since we took redelivery of the rig at the end of 2022 with yet another blue-chip operator.
"With this contract, SFL has now approximately $200 million of revenue backlog on Hercules and secured undisrupted employment for the rig until the fourth quarter of 2024. This contract, together with other recent contract rewards in the industry, illustrates that the market for advanced harsh environment semi-submersibles is firming and expected to remain strong for a prolonged period.”
According to Energy NL industry body, Equinor said it would deploy the Hercules at the Sitka prospect.
Energy NL CEO Charlene Johnson said: "The announcement by Equinor today that they will operate an exploration program of the Sitka prospect using the Hercules semi-submersible rig in 2024 is an important and exciting one for Energy NL members and the Newfoundland and Labrador energy sector; it demonstrates a commitment to the region and the Bay du Nord project. It also demonstrates confidence in the supply and service sector to work with the company on an important exploration campaign."
To remind, Equinor in June said it would postpone its Bay du Nord Canadian offshore oil project for up to three years, due to rising costs.
Johnson said:"Over the last several months, Energy NL has had encouraging dialogue with Equinor and I remain firm in my belief that the Bay du Nord project will proceed. As we navigate the energy evolution, the lower carbon oil produced offshore Newfoundland and Labrador will be a valued commodity, and as one of the lowest carbon projects in the world, Bay du Nord will have a significant role to play in meeting global energy demand.
“I look forward to this exploration program commencing and further demonstrating the value of the Bay du Nord project and the Newfoundland and Labrador offshore, as well as the leading role Energy NL members will play in the success of the exploration program and the overall project.”
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