Noble Ends Leviathan Drillship Contract

Israel’s Delek Group said July 19 that partners in the Leviathan offshore gas field development decided the previous day (July 18) to end the contract with the ultra-deepwater Atwood Advantage drillship and to award a contract to a cheaper rig.

That rig will drill the lower part of both Leviathan 7 Well and Leviathan 3 Well to their final depth, as from 1Q 2018, and then complete the production drilling in the Leviathan project.

Delek said that the US operator Noble Energy had informed Leviathan partners that the cost of the Leviathan 5 Well and drilling the upper part of Leviathan 7 Well is expected to be $106mn (at 100% equity), out of the previously approved total budget for these wells of $148mn.

The Delek statement did not name the new contractor, but said that dropping Atwood had followed the results of a tender by Noble that “indicated the possibility of contracting with a drilling rig at significantly lower costs than those of the Atwood Advantage rig.” 

Israeli newspaper Globes reported July 20 that privately-owned Israel Shipyards had signed an agreement to provide logistical services over 34 months to Noble. But at some $8mn/yr – $22,000/day – that seems too small to be a drillrig contract.

“Stage 1A development in the Leviathan reservoir development plan is progressing according to the time schedules and budged approved by the Leviathan partners, with the aim of allowing natural gas from the Leviathan reservoir to start by the end of 2019,” added Delek in its statement, noting equity partners in the project are Noble 39.66%, Delek Drilling 45.34% and fellow Israeli firm Ratio Oil 15%.

Also July 19, Delek Drilling said it had “fulfilled the conditions precedent” in the transaction for the sale of 9.25% of stakes in the Tamar and Dalit Leases, as outlined earlier this month.

Mark Smedley