China Oilfield Services Limited commits to Atlantis technology

Atlantis Deepwater Technology Holding (ADTH) and China Oilfield Services Limited (COSL) have now reached a final agreement for use of the Atlantis deepwater technology in upcoming deepwater exploration activities in China and other South-East Asia Pacific countries, including Australia. This agreement concludes negotiations following on from the Letter of Intent (LoI) signed in October 2004 between the two companies.

Under the terms of the agreement, COSL will invest approximately USD 9 million to prepare the first fully operational Atlantis unit for offshore application and gain exclusive rights to use this novel technology in the territory.

Following transportation of the unit to China and subsequent outfitting work, COSL plans to use the unit in combination with one of their own semi submersible drilling rigs. The Atlantis unit allows such a rig to extend its water depth capability from the present limit of 400 metres to as much as 1500 metres. This capability enhancement is achieved without the need to take the rig out of service for costly modifications. The first deep water well using Atlantis technology is expected to be drilled in the first part of 2006, most likely in the South China Sea.

The two companies have also agreed to continue to work towards establishing a joint venture company in China, which will be responsible for all activities related to the use of the Atlantis technology in the area, both for drilling and field developments.

Following the LoI signed in October 2004 COSL have carried out a number of technical verification activities, including model tank testing and numerous visits to Norway to inspect the full scale Atlantis unit available in Stavanger.

COSL, whose majority shareholder is the China National Offshore Oil Corporation (CNOOC), is the leading provider of oilfield services in the offshore China market. Their services cover each phase of offshore oil and gas exploration, development and production. The company owns and operates offshore drilling rigs, marine support vessels, oil tankers, seismic vessels, geo-technical survey vessels and offers a comprehensive range of well services and project management solutions.

ADTH is a technology development company located in Norway. The company has developed the Atlantis technology, which is basically a “tool” that allows drilling rigs nominally rated for shallow and medium water depths, to be used for deepwater drilling operations. The main shareholders in ADTH are the Norwegian ship owners Jan Olaf Tønnevold and Andreas K. L. Ugland, Aker Kværner and Statoil.

The Atlantis technology is based on the simple principle of establishing an “artificial” seabed at 200-400 meters below the sea surface. The Atlantis unit is a submerged steel tank, partially air filled, which is anchored to the seabed using an extended part of the first casing string being used in the well. As opposed to the conventional method of installing all equipment at the seabed, the equipment will now be installed at a “shallow” water depth. As a consequence of this, lower rated and more cost effective drilling and production vessels can be used for deep water operations.

Patents for the Atlantis system have been granted for most deep water areas worldwide.

The Atlantis unit which will now be completed for applications in Asia has been fabricated and tested in a joint industry project in Norway, funded by the Norwegian technology program “Demo 2000”, BP, Shell and indirectly also by Statoil, when they became a shareholder in ADTH. Included in the test was an actual deployment of the unit down to the installation depth at 200 meters below the sea surface.

ADTH is very satisfied with the fact that the first real application of the novel technology now will take place in China, the world’s second largest oil consumer. China is currently importing about one third of its total consumption and the demand for oil is projected to continue to grow rapidly. In order to improve this situation COSL and its parent company CNOOC are now actively seeking the latest technology for deepwater drilling so as to exploit China’s huge deepwater sector.


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