Deepwater rigs pricey

Moira Baird
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Averages US$494,000 per day

Chevron Canada says it has a third drill ship available in case it needs to drill a relief well at the Orphan Basin off Newfoundland's northeast coast.

For more than five weeks, the company has been drilling the Lona O-55 well in record-setting water depths of 2,600 metres.

Mark MacLeod

Chevron Canada says it has a third drill ship available in case it needs to drill a relief well at the Orphan Basin off Newfoundland's northeast coast.

For more than five weeks, the company has been drilling the Lona O-55 well in record-setting water depths of 2,600 metres.

The company has three drill ships in the Gulf of Mexico that can drill a relief well should a blowout occur off Newfoundland - Discoverer Clear Leader, Discoverer Inspiration and Discoverer Deep Seas.

All three are leased from Transocean.

The Discoverer Clear Leader is now assisting BP in its efforts to contain the oil spill in the Gulf of Mexico.

"That leaves two that could assist in the event of the need for a relief well, which we fully expect not to need because we're going to drill this well incident free," said Mark MacLeod, Chevron's Atlantic Canada vice-president.

He said he knows of no jurisdiction in the world that requires companies to drill a relief well for every exploration well drilled.

"But if that were the regulation, we would have to comply with the regulation."

MacLeod also said drilling two wells at the same time doubles the risk.

He declined to comment on the cost of hiring additional drill rigs or the potential cost of drilling a relief well.

Leasing a deepwater rig isn't cheap.

The rates for the three drill ships hired by Chevron in the Gulf of Mexico average US$494,000 per day, according Transocean's fleet update report issued in April.

Based on that, the cost of leasing a rig for 120 days would be more than $59 million.

Here's the day rate per rig in U.S. dollars:

Discoverer Clear Leader - $500,000.

Discoverer Inspiration - $472,000.

Discoverer Deep Sea - $512,000.

The Transocean report also says those day rates could change due to cost escalations.

During a question and answer session at the NOIA oil and gas conference in St. John's Thursday, MacLeod was asked what would happen if a discovery was made at Lona O-55.

"If it were a sufficient size, we would look to appraise that discovery," he said. "Appraisal would be the next step."

MacLeod could say not how soon such an appraisal well could be drilled.

"It all depends on the rig markets, what's available and then our sense of urgency.

"We've had this licence for a while so we'd be motivated. But, again, it all depends on the size of what we're looking at."

Drilling the Lona O-55 well entitles Chevron to keep its exploration licences until mid-January 2013.

mbaird@thetelegram.com

Organizations: Chevron Canada, BP

Geographic location: Gulf of Mexico, Newfoundland, Atlantic Canada U.S. St. John's

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Recent comments

  • Penney
    July 02, 2010 - 13:26

    I'm half expecting a surprise bout of drilling off NL with all of the inactive rigs in the Gulf of Mexico. They're always complaining about the cost and unavailability of rigs so now seems a good time to get some work done.

  • Taxpayer
    July 02, 2010 - 13:23

    Do they cost $100 Billion. That is the one credible estimate of the cost to BP in the Gulf. You pays your money and takes your chances.

  • Offshore Worker
    July 02, 2010 - 13:12

    I have drilled wells for all major oil companies, from west africa, Egypt, North sea. And by far, Chevron was the safest by using all safety tools possible.

  • Penney
    July 01, 2010 - 20:13

    I'm half expecting a surprise bout of drilling off NL with all of the inactive rigs in the Gulf of Mexico. They're always complaining about the cost and unavailability of rigs so now seems a good time to get some work done.

  • Taxpayer
    July 01, 2010 - 20:09

    Do they cost $100 Billion. That is the one credible estimate of the cost to BP in the Gulf. You pays your money and takes your chances.

  • Offshore Worker
    July 01, 2010 - 19:49

    I have drilled wells for all major oil companies, from west africa, Egypt, North sea. And by far, Chevron was the safest by using all safety tools possible.