Equinor extends for four years drilling contracts at $1.75bn value

Norway’s energy giant Equinor has exercised two options to extend contracts with three firms, Archer AS, KCA Deutag Drilling Norway AS and Odfjell Operations AS for a total of four years, in a move it claims will maintain 2,000 jobs.

Equinor said that the options for drilling services on fixed installations on the Norwegian continental shelf have an estimated value of NOK 18.4bn (approximately $1.75bn).

The contracts were signed in 2018 with three option periods of two years. The first two-year option was exercised in 2022, whilst the new contract period runs for four years from 1 October 2024.

The services they deliver to Equinor are drilling, completion, intervention services, plugging, maintenance and modifications on 19 of Equinor’s fixed installations. They also get support from sub-contractors for some of these services, generating additional jobs along the Norwegian coast.

Mette H. Ottøy, Equinor’s chief procurement officer, said: “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.”

As it is said by Equinor, in this option round, it has conducted a limited competition evaluating drilling suppliers on certain fixed installations based on a combination of technical and commercial criteria.

This has resulted 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, noted: “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.”

^{Source: Equinor.}