Beach Energy Ends Diamond Offshore Drilling Rig Deal Citing Late Arrival Date

OE Staff
Monday, April 20, 2020

Australian oil and gas company Beach Energy has terminated the contract for Diamond Offshore's Ocean Onyx semi-submersible drilling rig, citing delays in the rig's arrival.

The rig was to be used by Beach Energy at the Victorian Otway Basin, however, the company on Monday said it had issued the Ocean Onyx rig
operator Diamond Offshore Drilling Inc. with a notice of termination for the Ocean Onyx rig contract.

"The semi-submersible Ocean Onyx rig arrived in Victorian state waters in mid-April for commencement of the Victorian Otway Basin offshore drilling campaign. As the arrival date was later than had been agreed and specified in the rig contract, Beach exercised its right to terminate the agreement," Beach Energy explained.

The rig had not yet been accepted by Beach and therefore whilst some preliminary start-up costs have been incurred, the company’s spend to date is not material, Beach said.

Talks underway for new contract

"Beach has a good working relationship with Diamond and its other service providers. All parties are engaging in discussions with regard to the future operations of the Ocean Onyx rig and the Victorian Otway Basin offshore drilling campaign, with a view to agreeing a new contract in due course," Beach Energy said.

"This process will take into consideration executing the drilling campaign during the COVID-19 epidemic and associated restrictions. Beach’s preliminary assessment is that offshore drilling is unlikely to commence until FY21, with the exact timing to be agreed as part of any new contracting process," Beach Energy added. 

Offshore drilling contractors have been hit hard in recent weeks. The combination of COVID-19 pandemic and low oil prices has lead the drillers' clients - oil companies - to cut exploration budgets and seek ways to terminate or cut short the drilling contracts in place.

Rystad Energy recently said offshore drilling contractors were set to lose contracts worth $3 billion in combined revenue in 2020 and 2021, citing the impact of the coronavirus pandemic and low oil prices.

The likes of Valaris, Maersk Drilling, Shelf Drilling, Borr Drilling, Noble Corp, Transocean,  have all recently lost contracts, seen them cut short much earlier than expected, or received requests from clients to reduce day rates for rigs on contracts.

Categories: Drilling Industry News Activity Rigs Australia/NZ

Related Stories

Woodside to Shed Some Trinidad and Tobago Assets for $206M

Second Hai Long Substation Heads to Project Site Offshore Taiwan

Marine Masters Secures Wellhead Platforms Installation Job Off India

MODEC and Samsung Team Up to Install Carbon Capture Tech on FPSO

Shell Predicts 60% Rise in LNG Demand by 2040 with Asia Leading the Way

Tokyo Gas Enters LNG Market in Philippines

ADES’ Fourth Suspended Jack-Up Rig Gets Work Offshore Thailand

ABS Approves Hanwha Ocean’s FPSO Design

OPEC+ Passes on Oil Output Increase, Weighs the "Trump Effect"

Sembcorp Signs 10-Year LNG Supply Contract with Chevron

Current News

INEOS Wraps Up Acquisition of CNOOC’s US Oil and Gas Assets

Fire at Petronas Gas Pipeline in Malaysia Sends 63 to Hospital

Japan’s ENEOS Xplora, PVEP Ink Deal for Vietnam Offshore Block

CNOOC Makes Major Oil and Gas Discovery in South China Sea

Valeura’s Assets in Gulf of Thailand Remain Operational After Earthquake

Op-Ed: Kazakhstan’s National O&G Firm Positioning Itself as Global Energy Player

Woodside to Shed Some Trinidad and Tobago Assets for $206M

CNOOC Sees 11% Profit Growth in 2024 Driven by Record Oil Production

‘Ultra-Mega’ Offshore Deal for L&T at QatarEnergy LNG’s North Field Gas Scheme

Keel Laying for Wind Flyer Trimaran Crew Boat

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com