Aker BP extends contract with deepwater drilling rig until 2026

(WO) — Odfjell Drilling Ltd. has announced an extension of the firm contract with Aker BP for the Deepsea Nordkapp. The extended term, starting on January 1, 2025, will run for a fixed two-year duration in direct continuation of the current firm contract period.

The two additional years come with a market-based rate mechanism for compensation. The contract value for 2025, following the agreement with Aker BP in 2022, ranges from $124 million to $146 million, with a floor and ceiling day rate. The ceiling of the day rate range will be adjusted annually based on an inflation formula. The contract value for 2026 is approximately $179 million, also subject to annual adjustments based on an inflation formula.

Aker BP will additionally pay performance and fuel savings incentive bonuses. The contract extension is pending approval from license partners.

Besides the extended firm duration, the contract now includes rolling one-year un-priced optional periods. The pricing for these optional periods will be based on market rates set in advance of each respective year.

“We are pleased to extend our contract with Aker BP, building on our collaboration since the Deepsea Nordkapp's delivery in 2019,” Kjetil Gjersdal, CEO of Odfjell Drilling AS, said. “With this extension, our owned fleet is further secured with firm backlog from 2024 and beyond at increasing day rates. In addition, the rolling optionality mechanism will continue to give opportunity to further extend this backlog at market rates.”