North Sea drillers out in the cold as Statoil cuts rig contracts

Oslo

THE pressure is building on North Sea drillers starved of contracts as Statoil ASA deepens cuts in investment to cope with a collapse in crude prices.

In less than 18 months, Norway's biggest oil company has scrapped four years worth of drilling by cancelling or suspending rig contracts, according to Bloomberg calculations based on Statoil statements. That includes Monday's cancellation of a Songa Offshore rig four months early.

The cuts by Statoil, operator of more than 70 per cent of Norway's oil and gas production, are bad news for companies including Transocean Ltd, Seadrill Ltd's North Atlantic Drilling Ltd unit and Fred Olsen Energy ASA, which have floating rigs idling or completing offshore contracts in the country in the coming year, analysts said. By the time the market turns, they may be forced to scrap as many as 20 un…