Statoil Stacks High Spec Rig as Drilling Contractors Continue to Sweat

COSL Pioneer, image: COSL

Due to overcapacity in their rig portfolio, Statoil announced today they will be laying up the COSL Pioneer in the fourth quarter of 2014.

The COSL Pioneer has been on contract with Statoil since delivery from Yantai Raffles in August 2011. She is a DNV-GL class GM4000 design rig for use in harsh environments such as the North Sea and Norwegian Continental Shelf (NCS). The rig is currently drilling at the Visund field on the NCS northwest of Bergen with work completion planned for the end of September.

For Statoil, this is the second contracted rig that will be waiting on the new year to get back to work again. In July, Statoil announced intentions to stack the Scarabeo 5 in the fourth quarter.

Besides the millions of kroner that Statoil will burn through over that 90 day period while their rigs are inactive, this situation highlights the careful scrutiny that major national oil companies like Statoil are putting on their contracted rigs and the truly limited capacity that exists to absorb additional rig newbuilds that are being delivered from Asian yards.

Diamond Offshore, as an example, has 8 rigs they are actively marketing with an additional newbuild, the yet uncontracted Ocean BlackLion, due for delivery from HHI in Q2 2015.

As of August, Transocean had one deepwater rig, the Discoverer Spirit not under contract according to their fleet status report, however by the end of 2014, 9 more rigs are anticipated to go off contract.

For Seadrill, their yet uncontracted newbuild deliveries are only one part of their concern as Russian sanctions are weighing heavily on their ability to drill in the Russian arctic. The West Alpha and the West Navigator are directly affected by this resultant force majeure situation, however Seadrill still has 14 yet-uncontracted newbuilds scheduled for delivery over the next few years.