Norwegian giant Statoil ASA (STO - Free Report) has hired UK-based Odfjell Drilling for drilling services for the Mariner heavy oil development in the UK waters.
Based in Aberdeen, the Odfjell Drilling will carry out drilling services, maintenance of the drilling facility and drill pipe logistics for the Mariner field development. The contract is for a period of four years beginning Nov 2016, with options for another six years.
The contract also covers casing, tubing running services and alterations to the drilling facility. The transaction value is estimated at GBP 160 million. The deal also includes alternatives for Statoil’s Bressay development, located in the UK North Sea and is expected to start after a year from Mariner.
Currently, the Mariner platform is under construction. Odfjell Drilling will supply engineering and commissioning services to Statoil under the construction and start-up phase of the field development.
The field development plan submitted by Statoil and its partners for the Mariner field has been approved by the UK government's Department of Energy and Climate Change (DECC). The project is likely to involve investments exceeding GBP 4.7 billion.
Statoil expects the field to be commissioned by 2017 and have a producing life of about 30 years. The average yield is projected at about 55,000 barrel of oil per day over the plateau period from 2017 to 2020.
Statoil holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. There are other stocks in the oil and gas industry, like Range Resources Corporation (RRC - Free Report) , EPL Oil & Gas, Inc and Stone Energy Corporation (SGY - Free Report) , which appear more promising and carry a Zacks Rank #1 (Strong Buy).