Stena Scraps Rig Deal With Alpha Petroleum

Stena AB has today officially confirmed that an offshore rig contract signed last year with Alpha Petroleum has been canceled.

Oil and Gas People previously reported that Alpha Petroleum had signed a 480-day contract with Stena Drilling for the use of the Stena Spey semi-submersible drilling rig at the Cheviot field in the UK North Sea.

The plan was for Alpha to use the rig for multiple production wells at Cheviot, starting in the first quarter of 2019, after the Cheviot FID that had at the time been expected in 4Q 2018.

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However, three or so months later, Stena Drilling signed a contract with Ping Petroleum for the use of the Stena Spey rig at the Anasuria Cluster concession in the UK North Sea. It was not at the time clear what had happened with the Alpha Petroleum contract for the self-propelled semi-submersible offshore drilling rig.

In a half-year report last week (August 28), Stena AB, the parent company of Stena Drilling confirmed the Alpha Petroleum deal had been scrapped.

Stena AB said: “The contract signed with Alpha Petroleum, regarding the drilling rig Stena Spey, in 2018 for an eight-firm-well (estimated at 480 days) + fifteen option well campaign in the UK North Sea has been terminated by Stena following Alpha’s failure to secure finance for the project and a resultant delay in its commencement.”

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“A contract was signed with Ping Petroleum for the drilling unit Stena Spey for estimated 120 to 150 days duration, commencing in May 2019,” Stena confirmed last week.

To remind, Alpha had in 2018 also entered into a conditional 7-year charter agreement with Teekay for the Petrojarl Varg FPSO unit to be deployed at the Cheviot oil field in 2021.

This agreement too was terminated, after Alpha failed to provide initial funding to cover life extension and upgrade costs for the Petrojarl Varg FPSO.

Teekay, which announced the termination in June, said it would look for other deployment options for the FPSO, at the same time leaving the door open for the FPSO to end up at the Cheviot field after all, “under a revised financing model.”

 

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