Norwegian state-owned energy giant Equinor has handed out four-year contract extensions to three companies for drilling, completion, intervention, plugging, maintenance, and modification services on 19 platforms located off the coast of Norway.
With an estimated value of NOK 18.4 billion (over $1.75 billion), Equinor’s four-year contract extensions with Archer, KCA Deutag Drilling Norway, and Odfjell Operations for drilling services on fixed installations on the NCS will continue to provide jobs for 2,000 people per year. These firms also get support from sub-contractors for some of the services, generating additional jobs along the Norwegian coast.
These drilling deals cover Grane (Odfjell); Gullfaks A, B, and C (Archer); Heidrun (KCA Deutag); Johan Sverdrup (Odfjell); Kvitebjørn (KCA Deutag); Njord (KCA Deutag); Oseberg B, C, Sør and Øst (KCA Deutag); Sleipner A (Archer); Snorre A and B (Archer); Statfjord A, B and C (Archer); and Visund (Odfjell).
Mette H. Ottøy, Equinor’s Chief Procurement Officer, commented: “We appreciate the good collaboration we have had with these suppliers for many years, and have therefore added a fourth option of two years in addition to those agreed in the original contracts. This will help ensure predictability and form the basis for continuous improvements over time. This is a clear signal that we have long-term plans for cooperation with all three suppliers.”
After the original contracts were inked in 2018 with three option periods of two years, the first two-year option was exercised in 2022. As Equinor has now exercised two more options, the new contract period runs for four years starting from October 1, 2024.
Furthermore, the Norwegian giant conducted a limited competition, evaluating drilling suppliers on certain fixed installations based on a combination of technical and commercial criteria, resulting in some redistribution between these suppliers on four of the 19 installations in the contract portfolios.
Erik G. Kirkemo, Senior Vice President for Drilling & Well Operations, highlighted: “We know these suppliers well, and look forward to continued collaboration about safety improvements, energy management and operational efficiency. Through the various improvement activities we aim to maintain the drilling activity on our fixed installations for many years to come.”
These contract extensions follow a recent one, which Equinor exercised with AGR, part of ABL Group, for the blowout and well control studies on the NCS. The Norwegian giant also decided to put a call-off option into play for the engineering of the grid connection to Hammerfest LNG (HLNG), part of the Snøhvit Future project, at the start of March.