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The West Hercules rig. Image courtesy of Ole Jørgen Bratland/ Statoil ASA.

Statoil confirmed on Monday that it has canceled a rig contract with Seadrill.

Statoil said it has decided to cancel its contract for the West Hercules drilling rig, on behalf of the Aasta Hansteen licence.

Seadrill confirmed that the rig’s contract has been canceled and said it will receive a lump sum payment of about $61 million, plus dayrate and reimbursement of costs associated with demobilization of the rig.

Seadrill added that the West Hercules is currently being marketed for new work.

The rig has been on contract with Statoil since January 31, 2013 and has carried out an exploration campaign in offshore Newfoundland, Canada for the past 18 months.

The company’s original plan called for the Hansteen licence to take over the rig in the second quarter of 2016 for a drilling campaign that was to start around July 1, 2016.

However, in late 2015 the start-up of the Aasta Hansteen field was pushed back by one year to the latter half of 2018.

The field’s drilling program was postponed in light of the start-up delay.

Statoil said one of the reasons behind the cancellation is that “it is not preferable to complete the wells too early before production start-up.”

The contract for West Hercules was originally to expire on January 31, 2017.

Statoil operates the Aasta Hansteen field with a 75 percent stake.

OMV holds a 15 percent stake and ConocoPhillips holds a 10 percent stake.