Norwegian oil giant
) and engineering group Aker Solutions have decided to call off
their pact for charter of category B (Cat B) rig.
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A contract worth $1.9 billion was entered into by Statoil and
Aker in Apr 2012. Per the deal, Aker would provide a
semi-submersible rig capable of well-intervention services on the
Norwegian Continental Shelf (NCS) capable of operating all round
the year. It also included services such as charter of the
necessary equipment and services to perform well intervention,
sidetrack drilling, ROV operations, well testing and cementing.
The rig was expected to commence operations in 2015 and was
extended for a period of eight years with options of three times
for two years for the category B service.
Since the signing of the contract, both the parties had been
working together to identify and solve the technical challenges
posed by the rig's subsea systems. Although considerable
development had been made in dealing with these challenges,
technological prerequisites still remained.
In view of the failure to meet the engineering challenges with
the new concept, Aker Solutions decided to hold talks with
Statoil with respect to the terms and conditions for the Cat B
services. Subsequently, the parties agreed to terminate this
contract. Both the companies are liable to bear its own
project-related costs. However, Statoil is contemplating other
approaches to the concept.
Statoil aimed to enhance recovery from existing fields through
the use of Cat B concept. In 2012, average oil recovery rate from
Statoil-operated fields had increased to 50% from 49%. The
company has recently set a new goal of boosting recovery rate to
60% on the NCS by using new technology.
Statoil carries a Zacks Rank #4 (Sell). However, there are other
Zacks Rank #1 (Strong Buy) stocks -
Hornbech Offshore Services, Inc.
Newpark Resources Inc.
Gulfmark Offshore, Inc.
) - that are expected to perform impressively over the short