Ocean Rig loses drillship contract

It seems like bad news for the offshore drillers will never stop, as another one has lost a rig contract today.

This time it is Ocean Rig UDW, a drilling company run by the Greek shipping mogul, George Economou.

In a brief statement on Thursday, the driller said that “due to the dramatic fall of the crude oil price and the volatile market context, ENI has reassessed its drilling activities and taken the decision to exercise its right of terminating the contract of the Ocean Rig Olympia.”

Back in October 2015 the driller said that the employment prospects for its rigs would be scarce in 2016. In an operational update back then, the company mentioned the Ocean Rig Olympia, among other rigs, as a potential candidate for cold stacking if no new work is secured.

The rig had drilled for Eni between August 2015 and mid-November 2015, after which, according to Ocean Rig’s fleet status report it worked for Vitol in Ivory Costa between November 2015 for 45 days in total.

The drillship was then supposed to start drilling for Eni again in January, until June 2016.

Ocean Rig seems to be out of luck with the Olympia, as this is not the first time a contract for the rig is being terminated.

To remind, the ultra-deepwater rig, built in 2011, had previously drilled for Total in Angola and should have stayed with Total until August 2015, however the French oil giant decided to terminate in March 2015.

The latest fleet status report by the driller reveals Ocean Rig is still in discussions with Total E&P Angola regarding the termination and intends “to legally defend our rights should we fail to reach an amicable solution.”

During the downturn so far, the drillers have scrapped or cold stacked its older, less capable units, however if Ocean Rig keeps its October 2015 promise, this would be the first time we’ll see a 6th generation ultra-deepwater rig built in 2011 cold-stacked.

Offshore Energy Today Staff

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