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Maersk Oil awards three-year contract to Maersk Drilling

The Maersk Group's drilling company Maersk Drilling has landed a new contract for the rig Maersk Resilient, which will now work three years in the North Sea for Maersk Oil.

Photo: Maersk Drilling

A.P. Moeller-Maersk subsidiaries Maersk Drilling and Maersk Oil have signed a contract for the drilling unit's jack-up rig Maersk Resilient.

The rig will be deployed for Maersk Oil in a series of fields in the Danish part of the North Sea on a three-year contract worth an estimated USD 110 million, informs Maersk Drilling in a statement Wednesday. The work is expected to begin in October 2015.

Maersk Resilient has been laid up in Invergordon, Scotland, since May this year, where the rig has undergone maintenance work.

Maersk Drilling CEO Claus Hemmingsen is pleased with the new contract, and in the statement he stresses the importance of a rig that has been out of the market since May 2015 now being able to return to work in the North Sea.

Struggling North Sea market

The contract represents a bright spot in an otherwise difficult market for Maersk's oil businesses.

The low oil price and the major oil- and energy companies' investment slowdown is currently putting a massive pressure on the offshore sector, and this development has not least hit the companies operating in the North Sea. At the Maersk Group, companies Maersk Oil, Maersk Drilling and Maersk Supply Service have been hit especially hard by the current market situation.

In spite of the low oil price, it was a pleased Maersk Drilling CEO who in August presented the company's results for the first half of 2015.

Delivered a second quarter profit of USD 218 million, compared to USD 117 million in the same quarter last year, generating a ROIC of 10.6 percent. The results came as a positive surprise to analyst.

Maersk Drilling's second quarter interim report also informed that the company has ditched its long-term goal of securing a USD 1 billion profit by no later than 2018.

"These long-term targets date back to our 2010-2011 growth strategy. 2011 represents the last year in which we purchased new equipment based on speculation. Since then we've only acquired rigs for specific contracts. The 2018 vision was tied to plans to also acquire rigs in 2013, 2014 and 2015. But market developments mean that it is no longer a viable business case to purchase those rigs. The oil price is cut in half, and oil companies' profit margins have been reduced significantly," explained Claus Hemmingsen.

Read more about Maersk Drilling

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