North Sea operator BP has placed a £775million order with Odfjell Drilling for a new-build rig to work on its £3billion west of Shetland development.
The deal, the largest contract in Odfjell’s 40-year history, will see a new-build unit used for seven years on the Quad 204 project – a key part of which is the redevelopment of the Schiehallion and Loyal fields.
Odfjell said the work would involve taking on about 150 people on and offshore, with the onshore team based in Aberdeen.
The contract, subject to approval by partners on Quad 204, is due to start in the fourth quarter of 2014 and has three one-year extension options.
Jim Cowie, BP vice president for wells, said: “The Quad 204 partnership is making this major investment in its drilling capability in response to high future demand west of Shetland and a desire to invest in the latest equipment that can help deliver its business plans.
“This is an exciting development and builds on BP’s recent announcements concerning its investments in the North Sea.”
Deep water rig availability was raised as an issue by Valiant Petroleum earlier this week.
It said continued tightness in the global deep water rig market had caused a “significant postponement” of exploration drilling west of Shetland.
It said it had started talks with other operators in a bid to find ways to working together on attracting an additional rig into the area.
Construction engineering on the new semi-submersible to be used in the BP contract – a sixth generation harsh environment rig – has started in South Korea, where it is being built by Daewoo Shipbuilding & Marine Engineering.
The Quad 204 project will involve replacing the existing Schiehallion floating, production and storage vessel with a new one, due to be installed in 2015, and redeveloping the Schiehallion and Loyal fields.
They have produced nearly 400million barrels of oil since production started in 1998. An estimated 450million barrels is still available, says BP.
Odfjell, based in Norway, was founded in 1973. Its UK office in Aberdeen employs more than 80 people onshore and 350-plus offshore, depending on contracts.
The firm is currently operating seven platforms for Talisman Energy and five for BP in the UK sector.
President and chief executive Simen Lieungh said: “This contract award from BP is of great importance and represents a solid contribution to the company’s further growth.”
A Odfjell spokesman said: “As our activities in the UK increase, so will also our office (staff).”
BP is operator on Quad 204, owning 36.3%, alongside partners Shell (36.3%), Hess (12.9%), Statoil (UK) (4.84%), OMV (UK), (4.84%) and Murphy Petroleum (4.84%).