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Norway: Lundin to Drill 12 Wells with Island Innovator Rig

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Marine Accurate Well ASA – MARACC has signed a 12 well drilling Contract with Lundin Norway AS for the semi-submersible drilling rig Island Innovator

The contract is expected to provide Island Innovator with minimum of two years of  drilling operations offshore Norway with commencement in the 2nd  quarter of 2013 plus options for 3×4 additional wells.

The value of the initial contract period is expected to be around USD 370 million including mobilization and moving the rig to Norway. Maracc is scheduled to take delivery of its new build semisubmersible drilling and heavy well intervention rig in the 3rd quarter 2012 from the Cosco Shipyard Group in Nantong, China.

The rig will be operated by Odfjell Drilling AS.

Simen Lieungh, CEO of Odfjell Drilling said “The operation of Island Innovator will be an important contribution to Odfjell Drilling’s activity on the Norwegian continental shelf. The contract between the owner Maracc and Lundin Norway AS will mean greater predictability for Odfjell Drilling and our operations in Norway. We will need around 170 employees to operate the rig.

The construction of Island Innovator is being completed at Cosco Shipyard, Qidong in China. Odfjell Drilling has mobilised a follow-up team at the yard that will ensure progress and the quality of the remaining work. The rig will fly the Norwegian flag and will have an Acknowledgement of Compliance (AOC) for mobile installations from the Petroleum Safety Authority Norway.

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Odfjell Offshore Raising up to $500M to Develop Fleet

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by  Odfjell Offshor
Press Release
Monday, March 12, 2012

Norway’s Odfjell Offshore plans to raise up to $500 million in a private equity placing to develop further its fleet of six state-of-the-art ultra deepwater and harsh environment offshore drilling units. In addition, Odfjell Offshore may over-allot up to 10 percent of additional new shares, the firm announced Monday.

Parent company Odfjell Drilling will remain a majority shareholding in Odfjell Offshore after the private placing and will continue to provide its 40 years of operational experience, as well as its 3,000 highly skilled employees in the Odfjell Drilling organization, it said in a statement.

“Odfjell Offshore’s strategy is to expand our drilling operations in the ultra deep water and harsh environment market,” said Odfjerll Offshore Chairman Simen Lieungh. “Our fleet is uniquely positioned and we have a strong backlog. Currently, we have one newbuild ultra deep water semi under construction. In addition we have secured an option to build two similar units at Daewoo Shipbuilding & Marine Engineering in South Korea.”

Odfjell Offshore has retained DNB Markets, Pareto Securities, RS Platou Markets and Swedbank First Securities as joint lead managers and bookrunners, while Danske Markets and Nordea Markets as Co-Lead Managers to advise on and effect the private placement of new shares directed towards investors in Norway and other jurisdictions subject to applicable exemptions from registration and other requirements under applicable securities laws.

The offer price per share will be determined through a book-building process within an indicative price range of between $7 and $8 per share. The bookbuilding period commences Mar.12 2012 and will close Mar. 23 2012. Odfjell Offshore may, however, at any time resolve to shorten or extend the application period at its own discretion, it said.

Odfjell Offshore owns a fleet of highly capable and modern semisubmersible drilling units and UDW drillships currently under contracts in Norway, UK, Brazil, Angola and Tanzania:

  • Deepsea Atlantic (DW semisub) and Deepsea Stavanger (DW semisub).
  • - Two state-of-the-art ultra deepwater and harsh environment semi-submersible drilling units delivered in 2009 and 2010.
  • ‐ Deepsea Aberdeen.
  • - Ultra deepwater and harsh environment semi-submersible drilling rig currently under construction at Daweoo Shipyard in South Korea with expected delivery in May 2014.
  • - Options for two similar units with scheduled delivery in December 2014 and March 2015.
  • Deepsea Metro I (DW drillship) and Deepsea Metro II (DW drillship).
  • - Two ultra deepwater drillships delivered in 2011
  • Deepsea Bergen .
  • - Enhanced 3rd generation North Sea semisubmersible drilling rig designed and built by Odfjell in 1983 (with subsequent substantial upgrades).

Odfjell Offshore has decided to apply for listing on Oslo Stock Exchange following completion of the private placing and targets listing in end May 2012.

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INPEX Orders USD 2 bln FPSO from DSME (South Korea)

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The second largest shipbuilder in the world, Daewoo Shipbuilding and Marine Engineering, Co, announces that it has received an order to construct a giant Floating Production Storage and Offloading vessel (FPSO).

The order comes from a Japanese oil giant, INPEX and is a part of the company’s Ichthys project, offshore Australia.

Daewoo made the announcement on the Korea Exchange, saying that the estimated worth of the project is $2 billion.

The FPSO will serve for offshore storage and export of condensate from the Ichthys field. The condensate will be transferred from the CPF to the FPSO and, further, it will be exported from the FPSO via a floating loading hose to offtake tankers.

The vessel will also treat and dispose of produced water. It will be located approximately 2 km from the Central Processing Facilitiy and will contain liquid (condensate and water) treatment facilities, living quarters and associated utilities.

South Korea’s shipbuilders have benefited greatly from the INPEX’s Ichthys project. Samsung Heavy Industries Co Ltd has recently received a $2.71 billion order for the construction of an offshore central processing facility (CPF) for the Ichthys project.

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New Terminal JV in China for Odfjell SE

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Odfjell SE has made an agreement to enter into a joint venture via its subsidiary Odfjell Terminals Asia Pte Ltd (Singapore), with Tianjin Economic-Technology Development Area (TEDA) via its subsidiary Nangang Port Company to develop a terminal and marine facilities for bulk liquid chemicals, petroleum products and gases in the Nangang Industrial Zone (Tianjin) in China.

The initial phase of the joint venture will consist of three deep sea berths and have a total storage capacity of about 150,000 cubic meters.

The joint venture company will be named Odfjell Terminals Nangang (Tianjin), whereby Odfjell will hold 49% ownership and hold the operational management. The initial total investment is estimated to be about USD 160 million. The first phase will start operations during the second quarter of 2014. The Nangang Industrial Zone is located about 120 km from Beijing and will become the major petrochemical complex in the Western Bohai Bay area

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UK: Largest Contract in Odfjell Drilling’s History

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Odfjell Drilling has been awarded a significant pre-contract award with BP for the provision of a new build, semi-submersible drilling unit for use in the UK’s West of Shetland region. The contract value is approximately $1.2 billion, excluding options, and represents the largest contract in Odfjell Drilling’s 40 year history.

The new unit will be involved in drilling in the Schiehallion and Loyal fields and will form a key part of the Quad 204 development. The full contract, which is subject to approval by the Quad 204 Partnership, will have a fixed duration of 7 years and is due to start in Q4 2014.

In July 2011 BP announced a decision to progress a major re-development of the Schiehallion and Loyal oil fields to the west of the Shetland Islands.

Schiehallion and Loyal have produced nearly 400 million barrels of oil since production started in 1998 and an estimated 450 million barrels of resource is still available. The investment of circa £3 billion in the re-development of the fields will take production out to 2035 and possibly beyond.

President & CEO of Odfjell Drilling, Simen Lieungh states:

“This contract award from BP is of great importance and represents a solid contribution to the company’s further growth and is a recognition of Odfjell Drilling’s status as a reputable international drilling contractor. We have a track record of delivering new build units on time and on budget and this new build for BP will be the fifth new deep water unit for the company. We highly value our relationship with BP and look forward to developing this relationship further in the future.”

Jim Cowie, BP Vice President for Wells, said: “The Quad 204 partnership is making this major investment in its drilling capability in response to high future demand West of Shetland and a desire to invest in the latest equipment that can help deliver its business plans. This is an exciting development and one which builds on BP’s recent announcements concerning its investments in the North Sea. Odfjell Drilling is a safe, efficient and innovative drilling contractor that is performing well for BP in the North Sea and with Deepsea Stavanger offshore Angola.”

Fifth deepwater unit delivery

The new state of the art Sixth generation rig will be built in South Korea by Daewoo Shipbuilding & Marine Engineering (DSME).

“The new rig for BP is of the enhanced GVA7500 harsh environment design and will be a sister rig of the Deepsea Atlantic and Deepsea Stavanger previously delivered to us by DSME. We are pleased to continue our collaboration with DSME, says Mr. Lieungh.”

Construction engineering has commenced and keel laying is scheduled for March 2013.

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