Stena Drilling extends inspection contract with Sparrows Group as bear-ish banks slash 2018 price forecasts for N. Sea crude oil to $50-barrel

The Stena Don
The Stena Don

Sparrows Group has won a three-and-a-half-year extension to its inspection services contract for Stena Drilling’s global fleet of drilling vessels.

The contract scope includes carrying out LOLER lifting gear surveys, potential dropped objects surveys, cargo carrying unit (CCU) and non-destructive testing (NDT) inspections as well as rig specific maintenance.

As well as an extension to the contract, the scope has also been expanded to cover Stena’s entire fleet of seven vessels. 

Initially awarded until the end of 2017, the extension will see Sparrows deliver the inspection service provision until the end of 2020 and marks over 10 years of Sparrows holding the contract.

Stewart Mitchell, chief executive officer of Sparrows Group, said: “Effective inspection and maintenance routines are essential to guarantee the safe and reliable operation of critical equipment and avoid unnecessary downtime.”

Fears over prospect of $40-barrel US oil price
Fears over prospect of $40-barrel US oil price

Meanwhile, the price of benchmark N. Sea Brent crude oil slid down again yesterday as two global banks – Barclays and BNP Paribas – both slashed their forecasts to around $50-barrel.

BNP Paribas chopped its forecasts for Brent by $9 to $51 a barrel for 2017 and by $15 to $48 for 2018.

Barclays also cut its 2017 and 2018 Brent forecasts to $52 a barrel for both years from $55 and $57 respectively.

And – without a significant fall in oil inventories or a decline in US drilling and production – Goldman Sachs warned US crude could drop below $40 per barrel next year.

Because of the bear-ish banking forecasts, the spot price for crude also slipped on the London market, with Benchmark Brent crude sliding 15 cents at $46.73- barrel.

Crude prices are about 18% below their 2017 opening levels – despite a deal led by the Organisation of the Petroleum Exporting Countries to cut production from January this year.

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