ExxonMobil Extends Contract for Maersk Drillship at a Fraction of the Original Rate

Maersk Viking drillship. File Photo: Maersk Drilling

Maersk Drilling says it has been awarded a 150-day contract extension by ExxonMobil for the ultra-deepwater drillship Maersk Viking at a significantly lower day rate compared to the original long-term contract.

The company said the estimated value of the contract extension is $22.5 million, which corresponds to a day rate of approximately $150,000 per day.

Maersk Viking has been operating under a 3-year contract with ExxonMobil on the Julia field in the U.S. Gulf of Mexico since its delivery from the Samsung Heavy Industries (SHI) shipyard in 2014 when the price of crude oil was still over $100 per barrel. The original value of the contract was estimated to be about $610 million, making for a day rate of just over $550,000.

The original contract was scheduled to end in July 2017. With the extension, Maersk Viking will now be in operation for ExxonMobil until December 2017.

“I’m truly pleased on behalf of the crew on board the Maersk Viking and the entire organisation that we have been able to secure an extension of the contract with ExxonMobil. We look forward to continuing our collaboration with customers through a difficult period for the entire industry,” says Michael Reimer Mortensen, Vice President and Head of Global Sales in Maersk Drilling.

Speaking to the reduced day rate, Mortensen added:

“It is evident that we are now looking at a day rate much lower than the original contract, reflecting the current market situation. However, Maersk Drilling has significantly lowered cost levels across the fleet in the past years, enabling us to operate just as efficiently in this new environment. Our first priority is to add value to our customers and their operations, and we will work closely with them to ensure the delivery of safe and efficient operations.”

Maersk Viking was the first in a series of four ultra-deepwater drillships to enter Maersk Drilling’s fleet in 2014. Today, Maersk Drilling’s fleet counts 24 drilling rigs including drillships, deepwater semi-submersibles, and high-end jack-up rigs.