Rosneft terminates Norwegian contracts

Norwegian supply companies played a key role during Rosneft's drilling operations in the Kara Sea this year.

The Russian oil major is pulling out of a string of deals with Norwegian oil service companies.


Rosneft will have to manage without the Norwegians in next year’s Arctic drilling and exploration campaign. Several Norwegian companies now confirm that their contracts with the Russian oil producer are being terminated. Among them are Siem Offshore, Rem Offshore and Viking Supply.

The companies were all working closely with Rosneft in this year’s comprehensive drilling operation in the Kara Sea.

The contracts are terminated by Karamorneftegaz, a joint venture of Rosneft and ExxonMobil.

In a comment to BarentsObserver, Siem Offshore CEO Terje Sørensen says that his company has good experiences from this year’s operations in the Kara Sea and that it is happy to consider further operations in the area.

Siem Offshore was closely engaged in the service operations connected with the drilling of the University-1 well, the first drillhole made in the Kara Sea as part of a comprehensive cooperation agreement between Rosneft and Exxon. Also Viking Supply played an important role in the operations.

As previously reported, several hundred oil service workers were this fall involved in the University-1 operations. The oilmen, most of them Norwegians, were commuting great distances to and from the field. In 3-week intervals, they first traveled by plane to the Norwegian border town of Kirkenes and from there crossed the Russian border to Murmansk. There, in the port of Lavna, they embarked a ship which took them all the way to the far Arctic Kara Sea. All together, the distance is estimated to about 5000 km.

The terminated contracts follow the cold front in relations between Russia and EU and USA, and the sanction regime imposed on the Russian oil industry. Also the North Atlantic Drilling Ltd might ultimately lose its contracts with Rosneft. The NADL, a subsidiary of Seadrill, earlier this month confirmed that the closing of a $1 billion deal with Rosneft is being delayed by half a year.

Without its western partners, Rosneft risks losing momentum in its ambitious Arctic drilling program. The company is heavily dependent of expertise and technology from abroad, and will hardly be able to follow up its plans without the participation of partners like Statoil, Eni and Exxon, as well as the oil service companies like Siem Offshore, Rem Offshore and Viking Supply.