Amarada Hess contracts for drilling rig for Falklands

Sep 10, 1997 02:00 AM

Amerada Hess has signed a three-year contract with Norwegian-based Dolphin Drilling Ltd for a rig to drill the first well off the disputed Falkland Islands in the south Atlantic in May 1998.
The Borgny Dolphin rig will go into a yard in western Norway for the upgrades necessary to enable it to drill in water depths up to 500 metres, Hess said. Amerada Hess was one of 12 companies awarded a licence in the first Falklands oil round last October.
As operator of tranche A, Hess will drill the first well to the north of the islands.
Three other operators, Shell, British independent Lasmo and International Petroleum Corp of Canada, have joined Hess in the Falklands Offshore Sharing Agreement (FOSA) to split the costs of exploration drilling and an operational base on the islands.
The rig contract is expected to run from February next year. It is owned by the private Norwegian shipping and oil services group Fred Olsen Ltd.
The operators will share equally the costs of commissioning therig and its round trip from the North Sea to the south Atlantic -- estimated at nearly $ 9 million -- but drilling costs will be apportioned on the basis of the number of days each company requires.
Lasmo will drill the second well, followed by Shell and then IPC. The rig will then return to Amerada Hess for a second well, sources said.
Despite Buenos Aires' constitutional claim to the islands, Britain and Argentina restored diplomatic links in 1989 and signed an agreement on framework for oil and gas exploration in Falkland waters in 1995.
Last October, the Port Stanley authorities issued licences covering about 12,800 sq. km north of the islands.
Industry analysts said the area could contain 2 or 3 billion barrels of oil.

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