Equinor Signs $1.8 Billion In Drilling Deals To Keep Oil And Gas Output High

Equinor has extended $1.8 billion worth of drilling and well services supplier contracts as the Norwegian energy major looks to keep high oil and gas production offshore Norway and deliver stable energy volumes to Europe.

Equinor is extending key supplier agreements worth a total of $1.8 billion (17 billion Norwegian crowns), by exercising one-year options under three contracts for integrated drilling and well services, as well as two-year options under 18 corporate framework agreements for specialist services linked to these deliveries, the company said on Monday.

The local units of top oilfield services providers Baker Hughes, Halliburton, and SLB have been awarded the contracts for integrated drilling and well services.

These firms and 15 other suppliers have also been awarded corporate framework agreements for specialist services.

“New wells are expected to account for around 70 percent of Equinor’s production in 2035,” said Rune Nedregaard, Equinor’s senior vice president for Wells.

“This involves both more wells and more well interventions, which must be delivered faster and significantly more cost-efficiently than today.”

Equinor plans to drill 20 to 30 exploration wells every year, the company said early this year when it was awarded 35 new production licenses on the Norwegian continental shelf in the tender for mature exploration areas.

A total of 80% of the exploration will be near existing infrastructure, while 20% will explore new concepts and lesser-known areas, the Norwegian energy major said.

“There is still a lot of energy left on the NCS, but we need new discoveries to curb the expected production decline,” commented Jez Averty, Equinor’s senior vice president for subsurface, the Norwegian continental shelf.

“Phasing in oil and gas from new discoveries to existing infrastructure is a core task going forward,” Averty added.

Despite the best exploration results in four years in 2025, Norway will need even more exploration and discoveries, as well as investment in new oil and gas projects, to reverse an expected decline in output from the late 2020s, the Norwegian Offshore Directorate said earlier this year.