Anadarko sees net costs of $30-$40 mil from force majeure on rigs

Houston (Platts)--3Jun2010/739 pm EDT/2339 GMT



Independent Anadarko Petroleum said late Thursday it expects to incur estimated total net costs of around $30 million-$40 million from the force majeure provisions it has invoked on three US Gulf of Mexico deepwater drilling rigs it had contracted.

Anadarko spokesman John Christiansen in an e-mail to Platts confirmed Transocean's Discoverer Spirit drillship was one of the three, but would not specify the names of the two other rigs.

"Notification of force majeure has been provided to drilling contractors of three of the company's contracted rigs in the Gulf of Mexico," Anadarko said in a press release earlier Thursday.

UBS analyst Angie Sedita said in a report Thursday that the Discoverer Spirit will go to a standby rate at 100% of its previously contracted rate of $505,000/d for 60 days, and then can be cancelled.

"Transocean can re-contract the rig today, and already has expressions of interest," Sedita said.

Force majeure has begun to be invoked by upstream companies on drilling rig contracts as a result of a US Department of Interior's extension of an earlier three-week moratorium on all new wells offshore. Last week, DOI extended the ban by six months for all deepwater drilling but said shallow-water drilling may be resumed.

Anadarko had taken the Discoverer Spirit on a three-year contract that had a November 2010 expiration date. According to Transocean's latest fleet status report, the independent has renewed the contract for another three years, until November 2013, at a rate of $520,000/d.

--Starr Spencer, starr_spencer@platts.com