Equinor extends drilling contracts worth NOK18.4bn, ensuring 2,000 jobs annually

In a significant development for the oil and gas industry, Equinor, on behalf of its partners, has announced the extension of contracts with Archer AS, KCA Deutag Drilling Norway AS, and Odfjell Operations AS. This extension, worth an estimated NOK 18.4 billion, spans four years and is set to provide jobs for approximately 2,000 people annually on the Norwegian continental shelf.

The contracts, initially signed in 2018, included three option periods of two years each. Following the exercise of the first two-year option in 2022, this latest extension reaffirms Equinor’s commitment to its drilling operations and partner relationships. Notably, a fourth option period of two years has been added, underscoring the long-term collaboration plans between Equinor and the three suppliers.

Mette H. Ottøy, Equinor’s chief procurement officer, highlighted the importance of this extension, stating, “We appreciate the good collaboration we have had with these suppliers for many years, and have therefore added a fourth option of two years in addition to those agreed in the original contracts. This will help ensure predictability and form the basis for continuous improvements over time. This is a clear signal that we have long-term plans for cooperation with all three suppliers.”

The extension decision followed a limited competition among drilling suppliers for certain fixed installations, evaluated on a mix of technical and commercial criteria. This process led to a redistribution of responsibilities for four of the 19 installations included in the contract portfolios. The services provided under these contracts encompass drilling, completion, intervention services, plugging, maintenance, and modifications across 19 of Equinor’s fixed installations.

Equinor’s focus on safety improvements, energy management, and operational efficiency was emphasized by Erik G. Kirkemo, senior vice president for drilling & well operations, who said, “We know these suppliers well, and look forward to continued collaboration about safety improvements, energy management, and operational efficiency. Through the various improvement activities we aim to maintain the drilling activity on our fixed installations for many years to come.”

This contract extension not only secures thousands of jobs but also plays a critical role in the stability and growth of the Norwegian oil and gas sector. It demonstrates Equinor’s dedication to fostering a sustainable and productive relationship with its suppliers, ensuring the long-term viability of its operations on the Norwegian continental shelf.

The extension of these contracts is a testament to Equinor’s strategic approach to its drilling operations, emphasizing long-term planning, job security, and operational excellence. By focusing on continuous improvement and collaboration, Equinor is positioning itself as a leader in the sustainable development of the energy sector. This move not only secures thousands of jobs but also reinforces the company’s commitment to safety, efficiency, and environmental responsibility.