StatoilHydro drops rigs procurement for Norwegian Continental Shelf

StatoilHydro cancelled its rig procurement for operations on the Norwegian Continental Shelf because of high costs and the global economic uncertainty that has dampened oil prices.

Uchenna Izundu
International Editor

LONDON, Dec.24 -- StatoilHydro cancelled its rig procurement for operations on the Norwegian Continental Shelf because of high costs and the global economic uncertainty that has dampened oil prices.

The company said it is focused on reducing costs and determining priorities.

On Aug. 25, StatoilHydro received tenders from 15 contractors for 28 rigs, including semi-submersibles and jack ups. Contracts were to start at the end of 2012.

But back when the tenders were made, rates were higher because of greater demand for rigs in those days of higher oil prices. Since then, oil prices have dropped 60%, reducing the number of drilling prospects. As a result, StatoilHydro asked for updated tenders, including reduced rig rates, by Dec. 1.

"Despite the reduction in the prices offered, there is still a considerable gap between the tenders and the expectations we have concerning the rates," said Anders Opedal, head of procurements in StatoilHydro. "We have therefore decided to terminate the procurement process."

Contact Uchenna Izundu at uchennai@pennwell.com

More in Exploration & Development