Chevron cuts Atwood offshore contract

An Atwood Oceanics drilling rig.

An Atwood Oceanics drilling rig.

Chevron Australia has reduced an offshore drilling contract with Atwood Oceanics by one year, in light of damage on the Atwood Osprey vessel from a cyclone earlier this year.

The Atwood Osprey, under contract at the Iago 1B well as part of the Chevron-operated Wheatstone Project, offshore Western Australia, parted several mooring lines and drifted approximately 5.5 km from its original position during Cyclone Olwyn in March.

The duration of the force majeure event and resultant repairs necessitated by the damage incurred form the cyclone have triggered termination rights, in relation to which both parties have agreed to the reduction in terms, with contractual rates remaining unchanged.

The incident cause the shut-in of Woodside’s Pluto LNG Project, which processes gas from the Pluto and Xena gas fields, located in the Carnarvon Basin, approximately 190 km north-west of Karratha, after drifting near Pluto flowlines.

Repairs from the damage sustained by the rig, and required regulatory approvals, will be completed by 30 April 2015.

First LNG is expected at the Wheatstone Project in 2016, which is approximately 55 per cent complete, via a 250 MMcf/d onshore domestic gas plant at Ashburton North, WA.

The project is a joint venture between the Australian subsidiaries of Chevron (64.14 per cent), Apache Energy (13 per cent), Kuwait Foreign Petroleum Exploration Company KUFPEC (13.4 per cent) and Kyushu Electric Power Company (1.46 per cent), together with PE Wheatstone Pty Ltd (part owned by Tokyo Electric Power Company, 8 per cent).

Enter your details to subscribe to the free fortnightly Gas Today e-newsletter

Thank you for signing up for the Gas Today Online Update.