Statoil Cancels Seadrill Rig Contract

By Dominic Chopping

Norway's Statoil ASA (STO) said Monday it has decided to cancel a contract with Seadrill Ltd. (SDRL) for the West Hercules drilling rig, after postponing work on the Aasta Hansteen field in the Norwegian Sea.

The Aasta Hansteen licence was originally due to take over the rig in the second quarter of 2016 for a drilling campaign starting around July 1, 2016, but having previously decided to postpone the Aasta Hansteen field start-up by one year until the second half of 2018, the field-drilling programme will now also be postponed, Statoil said.

"One of the reasons is that it is not preferable to complete the wells too early before production start-up," Statoil said.

Seadrill said it will receive a lump-sum payment of around $61 million, plus dayrate and reimbursement of costs associated with demobilization of the rig. It is now marketing the West Hercules for new work.

On contract with Statoil since 31 January 2013, the rig has carried out an exploration campaign offshore Newfoundland in Canada for the past 18 months. The contract for West Hercules was originally due to expire on 31 January 2017.

-Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

May 23, 2016 03:46 ET (07:46 GMT)

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