Rig: Transocean Equinox

Songa Equinox commencement of drilling contract

Songa Equinox has today commenced drilling operations under its eight-year drilling contract with Statoil at the Troll Field on the Norwegian continental shelf, and the rig is now on operating rate. Songa Equinox is the first rig in a series of four Category D semi-submersible drilling rigs, specifically built for and contracted to Statoil. "The start of drilling operations for Songa Equinox is another milestone in the Cat D project. Our organization is looking forward to working collaboratively with Statoil over the next eight years", says Songa Offshore's CEO, Bjørnar Iversen.

Consent to use Songa Equinox on the Troll field

The PSA has given Statoil consent to use the Songa Equinox mobile drilling facility for drilling and completion of wells on the Troll field in production licences 054 and 085. Songa Equinox is a semi-submersible drilling facility and the first of four Cat D rigs that Songa is building for Statoil. Songa Equinox received an Acknowledgement of Compliance (AoC) from the PSA in November 2015. The Troll field is located around 65 kilometres west of Kollsnes in Hordaland County and is the largest gas discovery made in the North Sea. The Petroleum Safety Authority Norway has now granted consent to use Songa Equinox on the Troll field in accordance with Statoil's application.

Songa Offshore has received the PSA's Acknowledgement of Compliance (AoC) for Songa Equinox

t is the PSA's assessment that petroleum activities may be carried out using the Songa Equinox facility within the regulatory framework. The validity of the Acknowledgement of Compliance assumes that Songa Offshore ensures that the facility and relevant parts of the company’s organisation and management systems are maintained, to fulfil the terms and conditions set out in the PSA’s decision.

Songa Offshore takes delivery of first Cat-D semisub

Songa Offshore has today taken delivery of Songa Equinox from Daewoo Shipbuilding & Marine Engineering (“DSME”) in South Korea. The Songa Equinox will shortly depart South Korea enroute to Norway for commencement of an eight-year drilling contract with Statoil, with its first assignment on the Troll Field on the Norwegian continental shelf. The voyage to Norway will take place in a tow-assist mode and the rig will arrive with all third party equipment installed and ready for final acceptance testing. Commencement of drilling operations is expected to take place in Q4 2015. Songa Equinox is a sixth generation, high specification, harsh environment, midwater rig designed for efficient year around drilling, completion, testing and intervention operations in water depths up to 500 meters. The rig is certified DP3 and is equipped with a "state-of-the-art" drill-floor and an efficient layout with improved safety and working environment features. Songa Equinox is the first rig in a series of four Category D rigs specifically built for and contracted to Statoil.

PSA audits Songa Cat-D rig anchor chains

On 26th and 27th February 2015, the Petroleum Safety Authority Norway (“PSA”) carried out an audit of Songa Offshore's follow-up and management of the fabrication of the anchor chains for the Cat D rigs. The objective of the audit was to verify that the fabrication of anchor chain was being managed, followed up and performed in compliance with the regulations. The result of the audit was that, no non-conformities were identified. The audit concluded that the following improvements could be made; supply follow-up, planning and documentation of inspections and recording and documentation of repair grinding. The four Cat-D rigs are currently under construction as Daewoo Shipbuilding and Marine Engineering’s (“DSME”) shipyard in Okpo, South Korea.

Songa completes final CAT-D rig financing

Songa Offshore SE has announced that the documentation for the previously announced USD 1.1 billion senior secured credit facility for the financing of the last two Cat D drilling rigs, Songa Encourage and Songa Enabler, has been completed and the loan agreements have been signed by all parties. The financing consists of a revolving pre-delivery financing of USD 90 million per rig and a post-delivery financing of USD 550 million per rig. The pre-delivery loan will be priced at LIBOR plus 3.00%, the post-delivery loan will be priced at LIBOR plus 2.50% and was substantially oversubscribed. The post-delivery financing has a tenor of 5 year and an approximately 11.5 year amortization profile.

Songa providing Statoil with a new rig type

Statoil has awarded the contract for construction of two new drilling rigs for use on the Norwegian continental shelf (NCS) to Songa Offshore. The contract for the two category D rigs is worth an aggregate USD 2,47 billion for a fixed eight-year charter period. "Stepping up our industrialisation of the NCS we are very pleased to announce that Songa will help realise our industrial approach and we wish to give them recognition for their long-term perspective on this partnership", says Jon Arnt Jacobsen, Statoil's chief procurement officer. "Through joint efforts we intend to rejuvenate the rig fleet on the NCS and ensure that we use the right rig for the right purpose." "This procurement process has certainly attracted great interest among rig entrepreneurs, contractors and investors", says Jon Arnt Jacobsen. "Many bidders have taken part in this process and the competition has been keen. Considering that we are ready to start this less than two years after the idea was launched, I consider this a success story!" Capable of operating in 100 to 500 metres of water this specially designed category D drilling rig can drill wells down to 8,500 metres. It will be a workhorse on mature fields, primarily drilling production wells and completing wells, enabling Statoil and its partners to produce more oil from the fields. Troll is the very cornerstone of Norwegian gas production, and also one of the largest oil fields on the NCS, oil production in 2010 totalling more than 120 000 barrels per day. Holding many world records Troll will now also be the first field to be serviced by the new specially designed rigs. Statoil has awarded the contract for the charter of the two first category D rigs on behalf of the Troll licence. "Statoil and its Troll partners have high ambitions for the further development of the field and we are pleased to have taken a decision to charter two specially designed rigs", says Hans Jakob Hegge, Statoil's senior vice president for Eastern North Sea operations in Development and Production Norway. "We will now have a tool capable of performing the demanding tasks ahead. The rig capacity on the NCS is limited, and increased capacity is essential to ensure enhanced recovery. The new rigs are expected to operate 20% more efficiently than conventional rigs, and we look forward to having the new rigs up and running from 2014." A hull designer, several topside suppliers, yard and rig entrepreneurs have helped develop the category D rig concept. Songa has assigned the rig construction work to the DSME yard in South-Korea. Aker Solutions has been picked as the supplier of the drilling equipment. The project concept and design has taken one year and the implementation period is expected to take three years, including detail engineering, construction and transportation to the NCS. The mobilisation from the yard in South-Korea to the North Sea is included in the contract value and will take about three months. The rig hand-over is scheduled for the second half of 2014. The fixed contract period is for eight years per rig, with four three-year options, i.e. in practice a 20-year contract per rig. This is a long-term approach, which ensures rig capacity for Statoil's growth ambitions, as well as predictability for the rig company. Statoil is considering including two more category D rigs in its portfolio. For this purpose Statoil has secured the opportunity to exercise its option for two category D rigs from Songa Offshore, but is also continuing its evaluation of the received bids from other bidders. During the last half of 2011 Statoil will consider various contractual solutions to ensure the construction of another two category D rigs, including the opportunity to take an ownership position in the rigs.

Long-term contract for new rig design

Statoil is sending out an invitation to tender for a new type of drilling rig. It is specially-designed by the industry on behalf of Statoil for use on mature fields on the Norwegian continental shelf (NCS). The purpose is to make drilling and completion of production wells less expensive, more effective and safer, and thereby boost oil recovery. Discoveries on the NCS are getting smaller and it is becoming more important to increase drilling activity in mature fields to attain the full potential of the NCS. To meet this challenge, lower rig rates, greater drilling efficiency and access to rigs are key factors. “The rigs delivered to the NCS in recent years were first and foremost constructed for operations in deep water,” says Jon Arnt Jacobsen, chief procurement officer in Statoil. “That means that they are big and too costly for our requirements and challenges on the NCS. We are therefore taking steps to rejuvenate the rig fleet and ensure that the right rig meets the right requirements.” The specially-designed category D rig is able to operate at water depths of 100-500 metres and drill wells down to 8,500 metres. It will be a workhorse on mature fields, primarily for drilling production wells and well completion. In this way, Statoil and its partners can get more oil out of the fields. The rig has been developed in collaboration with various industry players. Statoil is issuing a tender for minimum two such rigs for work on the NCS. The contract will run for either eight years with four three-year options or for 20 years firm contract period. This is an unusually long period of contract which will reduce the risk for the drilling contractor who will build the rig. Statoil is also considering taking an ownership stake in the rig. “Statoil is taking responsibility for a long-term development of the NCS – we see that there are still big opportunities here,” says Jacobsen. “Now we need to think anew with regard to reducing drilling costs and we will see if it’s possible to achieve a more industrialised development.” It is many years since big discoveries were made on the NCS. Minor finds are made but the margins are lower. It is therefore necessary to reduce rig costs in order to realise the potential value. Small finds are also often made near existing fields. Fast developments are then important so that the existing infrastructure can be utilised. “The key to maintaining today’s production level on the NCS towards 2020 is improved recovery from existing fields and fast and effective development of new fields,” says Øystein Michelsen, executive vice president for Development and Production Norway. “In order to implement these measures it is crucial that we secure a rig fleet which is adapted to suit the assignments and which can work more effectively.” A rig like this will be able to drill and do well completions in the North Sea and the Norwegian Sea throughout the year. “The goal is that the new rig will drill 20% more effectively than conventional rigs,” says Jon Arnt Jacobsen. “This will help to counteract the cost trends in the rig market.” Plans call for the contract to be awarded in the third quarter of 2011 and the rigs to be delivered in the second half of 2014.