Equinor awards contracts worth NOK 2.5 billion

Equinor has awarded drilling service contracts at a total value of about NOK 2.5 billion, exclusive of options, to several suppliers. The services will be delivered to both new and existing fields on the Norwegian continental shelf.

Contracts for services related to liner hangers were signed in Equinor’s digital laboratory at Forus, Stavanger, on 14 May. Contracts for additional completion and downhole monitoring have been signed earlier.

“These contacts will help us continue our safe and efficient drilling and well operations. The suppliers are specialists that we have worked with before, and we know what they stand for. We look forward to continuing our good cooperation,” Geir Tungesvik, Equinor’s Senior Vice President, Drilling & Well, said.

The total contract value for these services is estimated at about NOK 2.5 billion for the 3-year fixed contact term. In addition, there are five 2-year options for all awards.

Niche deliveries

The contracts signed cover niche deliveries complementing the integrated drilling and well service contracts signed in 2018.

“We have standardized the contract set-up between various suppliers. This simplifies the collaboration and creates win-win solutions. For these services, we do not buy services from the biggest suppliers only, but also from small-size suppliers with the required specialist competencies,” Peggy Krantz-Underland, Equinor’s Chief Procurement officer, said.

The services are key to capturing additional value on the Norwegian continental shelf, aiming to improve the recovery rate from 50-60%.

Three services

The services related to liner hangers and additional completion are based on framework contracts with standardized conditions where the volume may vary. The estimated value is NOK 1 billion and NOK half a billion respectively for three years.

The downhole monitoring contracts were awarded in March, covering a predetermined scope at a value of about NOK 1 billion for three years.

Contracts:

About the services 

Liner hangers reduce the length of the last liner set in the well by several hundred meters by allowing the liner to be suspended below the ground, rather than extending a single casing string to the top of the wellbore. This saves metal/cementing costs and time for rig and personnel.

Additional completion is a collective term for equipment and service deliveries that help prepare the well for production.

Downhole monitoring – technologies that use an electric or fibre-optic cable run through the well, with a gauge at the bottom measuring pressure and temperature. It is not possible to complete the well without this technology.