Eric Watkins
Senior Correspondent
LOS ANGELES, Jan. 30 -- Iran's North Drilling Co. (NDC) and China Oilfield Services Ltd. (COSL), the drilling unit of China National Offshore Oil Corp., have signed a cooperation agreement that includes repair and maintenance of the Alborza semisubmersible drilling rig in the Caspian Sea.
In a statement, COSL said the agreement, valued at $33 million over 3 years, also includes exploration management, staffing for the testing and operational management of the semi, and training of Iranian workers.
COSL will undertake the drilling of two exploration wells, as well as appoint senior management and management of an oil rig and train local staff in Iran.
During a Jan. 20 signing ceremony, NDC Executive Director Heidar Bahmani said that oil exploration and exploitation in the sea has "always been Iran's long-standing goal."
He also said COSL had been awarded the contract due to its technical capabilities and more reasonable offer compared with its European rivals.
COSL CEO and Pres. Yuan Guangyu said the agreement represented a new breakthrough and service model for the Chinese firm by providing rig management services instead of merely supplying equipment.
Other contracts
Separately, COSL's agreement with Iran is the latest of several for the Chinese firm in recent months:
-- On Jan. 17, COSL said it secured three service contracts with CNOOC Myanmar for a total of $4.95 million to provide predrilling, drilling fluid, and cementing operations on an onshore block in Myanmar. The order followed a contract jointly won in January 2005 by CNOOC Myanmar Ltd., Singapore Golden Aaron Pte., and China Huanqiu Contracting & Engineering Corp. to explore for oil and gas on three blocks in Myanmar.
-- In December 2005, COSL said it secured a 2-year contract worth $3.7 million from Philippine National Oil Co. (PNOC) to provide geothermal well-cementing services. Under the terms of the contract, COSL will provide PNOC with facilities, tools, manpower, and technical support in order to help PNOC extract geothermal energy for electric power generation. That contract covers 28 wells and drilling operations are expected to start in March, COSL said.
-- In November 2005, COSL said it secured two drilling contracts in Australia and Myanmar worth a total of $46 million. It entered into a $40 million, 1-year service contract with Australia's Woodside Energy Ltd. to provide drilling-related services starting in April, and a $6 million service contract with South Korea's Daewoo International to drill offshore Myanmar.
On Jan. 23, COSL said the average utilization rate of its rigs for 2005 fell slightly to 98% from 98.8% in 2004. It also said the total number of wells drilled rose 2.1% to 246, of which 190 were development wells and 56 were exploration wells.
Contact Eric Watkins at [email protected].
