Saudi Aramco has paused its contract for the High Island IV jack-up rig, owned by Shelf Drilling.
The contract will be suspended for 12 months, once work that was currently under way has been completed. Shelf Drilling has agreed to suspend work at a zero dayrate.
The contract will be extended by the amount of time suspended.
The High Island IV’s current contract with Aramco started in February 2020 and was due to end in February 2030. Shelf had been planning on taking the rig out of service in the third quarter of this year.
Shelf said it had reached long-term extensions on four of its jack-ups, including the High Island IV, in December 2019. Three of the contracts were for 10 years, while the Main Pass IV received five years.
The company did not reveal what the dayrate was for the rigs. The contracts were in line with “general rates for these rigs”, Shelf said, with an annual adjustment based on the previous 12-month average Brent price.
The four rigs have been working in the area since 2005.
Slowdown
While Middle Eastern states have not reduced drilling as much as other parts of the world, there has been a marked reduction in activity since the oil price crash of March and April.
In addition to extending the Shelf contracts for 10 years, Aramco signalled support for new rig plans. In January, for instance, ARO Drilling ordered two new jack-ups. ARO is a joint venture between Aramco and Valaris.
Thinking changed as prices fell. Aramco suspeneded Noble Corp.’s Noble Scott Marks jack-up in the first half of May for up to a year. Aramco will pay no dayrate during suspension but Noble can seek other work in the region while the rig is out of work.
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