Diamond Offshore’s (NYSE:DO) Ocean GreatWhite is facing an additional month out of action after an equipment collapse incident in the West of Shetland.
Last month, the rig’s lower marine riser package (LMRP) “unintentionally separated” during a storm and fell to the seabed while it was on a job for BP.
The world’s largest semisubmersible rig subsequently returned to port at Kishorn last week, with Diamond “investigating the incident to understand the cause of the separation”.
© Supplied by Sam BilnerThe rig was previously expected to be off rate for an estimated 90 to 100 days and then return to work for BP in late April or early May.
However, Diamond now expects that recovery and repair activities will result in the Ocean GreatWhite being off rate for approximately 120 to 130 days from the date of the incident.
Diamond currently estimates the rig will return to earning rate under its current contract by late May or early June this year.
Financial hit to Diamond
Diamond had been carrying out a five-well campaign for BP at Ben Lawers and later the Schiehallion field, around 125 miles west of Shetland – though progress has now been waylaid.
Meanwhile, the recovery operation is expected to cost the company tens of millions of dollars.
According to rig analysts Esgian, Diamond has recently successfully retrieved the LMRP to the rig and removed the blowout preventer (BOP) from the secure well and raised the BOP to the rig.
Esgian said there are no reports of damage to seabed infrastructure and no known environmental impacts or lower hull damage to the rig from the incident.
If the Ocean GreatWhite is off rate for between 120 and 130 days, the downtime could result in up to $35 million in lost revenue.
When the company’s insurance coverage, maintenance and recovery costs are factored in, Diamond could be facing a financial hit of anywhere between $33 million to $35 million as a result of the incident.
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