Bassoe Analytics weekly rig market round-up (week 39)

Bassoe Analytics weekly rig market round-up (week 39)
Over the past week Odfjell, Vantage and Stena confirmed new contracts for their rigs, Shell submitted plans for further exploration in the Alaskan Arctic, and Seadrill and Sapura were the latest firms to be targeted in the Brazilian Car Wash probe.

In case you missed it, you can access last week's rig market round-up here.

Rig Contracts

Aker BP and Odfjell Drilling have signed a contract that commits further work to harsh-environment semisub Deepsea Stavanger under the existing Frame Agreement. The initial contract scope is five wells and has an estimated contract value of up to USD 44 million plus incentives. The contract is set to commence by end of Q3 2021 at the latest, back-to-back with Deepsea Stavanger’s return from South Africa.

Vantage Drilling has secured a one-year extension for its jackup Emerald Driller with Total Qatar. The rig is now firmly committed until Q2 2022 with further options available thereafter. Meanwhile, jackup Pearl Driller (Soehanah) has been awarded a 35-day well (plus mobilization) from Pearl Oil offshore Indonesia, commencing in Q4 this year. 

NewAge's contract to use Vantage drilling jackup Sapphire Driller offshore the Congo is now scheduled to begin in early 2021. The deal had originally been due to begin this year but has been hit by Covid-19 delays.

Further to our Bassoe Analytics weekly rig market round-up from week 36, Stena Drilling has now confirmed that Repsol is behind its new contract for ultra-deepwater drillship Stena IceMAX offshore Mexico. The contract will consist of one well plus a one-well option, commencing in May or June 2021 and work will be carried out in Block 29 of the Salina Basin.

Odfjell Drilling has received a notice of early termination from BP for the contract for semisub Deepsea Aberdeen. The contract was originally due to expire in April 2022. In accordance with the contract terms, Odfjell Drilling will be compensated with an early termination fee through monthly payments until April 2022. Concurrently, the same rig has been awarded a contract by Wintershall Dea to undertake exploration wells at the Dvalin North and Bergknapp fields and development wells at Vega field on the Norwegian Continental Shelf. The contract consists of four firm and three optional wells with an expected firm duration of approximately 300 days. The contract is anticipated to commence in February/March 2021. In addition, Wintershall Dea and Odfjell Drilling have entered into a long-term frame agreement for potential future rig needs.

Archer has secured a four-year contract extension with Apache for the provision of platform drilling operations and maintenance services on Beryl Alpha and Bravo, Forties Alpha, Bravo, Charlie and Delta in the UK North Sea. The extension will commence 1 January 2021 in direct continuation of the current contract. Based on current and expected future activity, including additional services through our Engineering, Rentals and Oiltools divisions, the extension has an estimated value of up to USD 100 million.


Rig Demand

Shell has submitted plans to resume oil and gas exploration in waters offshore Alaska's northern coast. The 5-year plan suggests seismic acquisition in 2021–2022 with drilling in 2023–2024. Exploration would be conducted in the West Harrison Bay license in the Beaufort Sea, just offshore the National Petroleum Reserve in Alaska. The operator had an unsuccessful campaign in Alaska during 2012–2015, during which time the semisub Kulluk ran aground during severe sea conditions and was later scrapped. 

OKEA has acquired a 30% interest in the Neptune Energy-operated Norwegian PL938 licence, containing the Calypso prospect. The partners plan to drill an exploration well at the prospect in late 2021 or early 2022. As part of the agreement, OKEA will carry a portion of Neptune's costs for the well. PL938 is located less than 10km north-west of the OKEA-operated Draugen field and directly north of the Bauge and Hyme fields.

Drilling Activities & Discoveries

BP has received consent to drill the Ironbark-1 exploration well offshore Western Australia, using Diamond Offshore semisub Ocean Apex. The rig is anticipated to commence drilling from late October this year. Exploration permit WA-359-P is located in the Carnarvon Basin, offshore Western Australia, approximately 50km from existing North West Shelf LNG infrastructure. The well is expected to drill to approximately 5,500m.

The National Hydrocarbons Commission (CNH) has approved CNOOC's drilling of the deepwater HPHT Ameyali-1EXP exploratory well, which will be carried out using drillship Valaris DS-15. Operations are scheduled to take 84 days and will commence this week. Total cos of drilling is approximatley USD 91.6 million. 

ONGC has completed its three-year drilling campaign using drillship Aban Ice offshore India and the rig has moved inshore for stacking. 

Wintershall Dea is due to complete drilling operations at the Dutch Sillimanite field using jackup Maersk Resolve by the end of this month, after which the rig will be moved inshore for warm stacking. 

CNOOC International has concluded drilling operations at the UK Buzzard field using mid-water semisub COSLPioneer and the rig will now move inshore for stacking until a new contract can be found for it. 

Total has concluded drilling operations at the 12/30–2 Finzean exploration well in British waters using jackup Noble Sam Turner. The rig will shortly mobilize to Nigg, UK, for stacking. 

Offshore Canada, Equinor has returned to the Cappahayden K-67Z well in EL 1156 using harsh-environment semisub Transocean Barents. The rig recently concluded drilling at the Cambriol G-92 well and it is understood that it will return to Norway for stacking upon its conclusion of work with Equinor in the coming weeks. 

Vietsovetpro is now scheduled to begin drilling operations using jackup PV Drilling II offshore Vietnam during October. The rig is expected to undertake around 100 days of work for the operator. The jackup has been undergoing maintenance works since completing a drilling campaign in July for Petronas Carigali in Malaysian waters. 

Following its discovery with the Redtail-1 exploration well offshore Guyana in early September, ExxonMobil will extend its drilling activities at the site, using ultra-deepwater drillship Noble Don Taylor, until 31 October, 2020. The Redtail-1 drill site is approximately 103 nautical miles from the Coast of Guyana, within the Stabroek block, and covers an area of one square kilometre.

Equinor has commenced drilling of the an exploration well targeting the Apollonia prospect offshore Norway, using harsh-environment semisub West Hercules. The well is located in Norwegian Sea licences PL263D/E. Should there be success in the main wellbore, a side-track appraisal well may be drilled. 

Crosco jackup Labin has mobilized offshore Croatia where it will shortly begin drilling the Irena-2 well for EdINA. 

Petrobras informs that it has identified the presence of hydrocarbons in exploration well of block C-M-657, located in the pre-salt of the Campos Basin. Well 1-BRSA-1376D-RJS (Naru) is located approximately 308km from the city of Rio de Janeiro, in water depth of 2,892m, and verified the presence of hydrocarbon in carbonate reservoirs of the pre-salt section. The well data will be analyzed to better assess the potential and direct the exploratory activities in the area.

Bahamas Petroleum has confirmed an earlier Bassoe Analytics's report regarding drilling of its Perseverance-1 exploration well offshore the Bahamas. The operator confirmed that it will use ultra-deepwater drillship Stena IceMAX for the drill, with operations to begin before Christmas. 


Rig Mobilizations

Tender-assist drilling rig Atlantica Delta has now completed its process of demobilization from Total’s Moho Nord TLP offshore Congo (Brazzaville) and is now under tow to the Canary Islands, Spain, where it will be stacked while other opportunities are pursued. The rig drilled 16 wells for the operator during its contract. 

Jackup Noble Regina Allen has arrived in Chaguaramas port, Trinidad, from Canada ahead of starting a new development drilling campaign with BHP Billiton later this month. The campaign will keep the unit busy until at least Q2 2021 with options also available to extend. 

Stena Drilling ultra-deepwater drillship Stena Forth has left Gibraltar and is now en route to Las Palmas in the Canary Islands. The rig is set to continue its journey to Suriname during the fourth quarter in preparation for a new one-well drilling campaign with Tullow Oil. The rig is due to begin work in January or February 2021 in Block 47. 


Financial Information


ADES Group's backlog recorded USD 1.2 billion as of 30 June, 2020, compared to USD 1.3 billion at 31 December 2019, as the adverse market conditions due to COVID-19 and oil price volatility presented for reduced tendering and renewal activity. Nonetheless ADES added around USD $140 million of backlog during H1 2020. In H1 2020, in the KSA, Admarine 262 secured a contract renewal for an additional five years at a higher day rate, while for Admarine 261 the contract was extended for an additional year at the same day rate. 

Borr Drilling has reached an agreement with the bank syndicates and with Hayfin (provides USD 595 million in loan facilities), to extend their maturity to January 2023 and lower the minimum liquidity covenant to USD 5 million until maturity. The next step of the plan is to reach agreement with the yards before end-2020 to extend all remaining installments and maturities under the company's yard facilities to 2023 and beyond. Meanwhile, it is contemplating offering USD 40 –50 million in new depository receipts, representing the beneficial interests in the same number of the company's underlying common shares, each with a par value of USD 0.05, and each at a subscription price of USD 0.70. On Friday, the company announced that it is currently in discussions with its lenders to improve the concessions previously announced and has therefore decided to extend the application period for the Equity Offering to 08:00 CET/2:00 am EST on 29 September 2020.


Oil Price


In its September Short-Term Energy Outlook, the US Energy Information Administration (EIA) stated that the OPEC+ production cuts and curtailments in the United States are set to help global inventories to continue drawing down for the rest of the year and most of next year, resulting in a relatively balanced market by the end of 2021. The OPEC+ deal and the production drops elsewhere, most of all in North America, have brought global supply below the level of demand for the first time since the middle of 2019, the EIA estimated, noting that the supply deficit has helped global inventories to decline since June.  




Bassoe Analytics has evaluated how many competitive offshore jackups and floating rigs would need to be permanently removed from the fleet to be able to bring marketed utilization up to 85%, which is generally the level it should be at for there to be enough upward movement in day rates to make the business profitable again. Read the full article here: Ending offshore rig owners' bankruptcy nightmare requires a lot more scrapping

Brazilian and Dutch police carried out search warrants on Wednesday as part of a corruption probe into offshore oil rig company Seadrill Ltd and Sapura Energy Bhd, as Brazil’s  ‘Car Wash’ corruption investigation eyes more international firms.This is an attempt to deepen ongoing probes into three contracts worth $2.7 billion signed between Sapura and state-run oil firm Petrobras in 2011. The contracts, for the construction and charter of three pipe-laying support vessels are still in effect today. In the statement, prosecutors described an alleged scheme in which Sapura, a joint venture in Brazil between Sapura Energy and Seadrill, allegedly paid bribes worth 1.5% of the contracts it won with Petrobras. Some of that bribe money appeared to have made its way back to two “high-ranking” Sapura Energy executives in Malaysia, prosecutors said. 

CGG has announced a Q4 delivery of the fast-track results from its recently acquired 3D multi-client seismic survey of the Gippsland Basin in South East Australia. The broadband data will enable both incumbents and new players to make informed decisions when bidding on blocks in the Gippsland Basin area of Australia’s 2020 Offshore Petroleum Exploration Acreage Release.

A Norwegian offshore strike was averted on Thursday when three labor unions agreed on a wage deal with the owners of floating offshore oil rigs, preventing a strike that could eventually have halted the exploration for new oil and gas reserves, the unions, and companies said in separate statements on Thursday. The deal between the Norwegian Shipowners' Association and the Industri Energi, Safe, and DSO labor unions comprises around 7,500 workers.

The Norwegian Petroleum Safety Authority Norway (PSA) has completed its investigation of the incident on Seadrill harsh-environment semisub West Mira of 14 March 2020 where the lower marine riser package (LMRP) was unintentionally disconnected. Several breaches of the regulations were identified, and Seadrill has now been given an order. The rig is committed to Wintershall until 2022. 


Get on-demand offshore rig values from Bassoe Rig Values



Did you know that Bassoe Analytics has launched Bassoe Analytics Premium, a subscription service which gives users enhanced access to our offshore rig market data and analysis platform?

Learn more about Bassoe Analytics here


Do you have the Bassoe Analytics mobile app? 

On the back of the success of the Bassoe Analytics website, we've decided to go mobile. Now you can access our open source offshore rig database when you're on the go.  Find out more and download the app from the Google Play or App Store here.


Data: Bassoe Analytics, Image attribution: Odfjell Drilling.

Sign up for our newsletter

Get email updates for our latest offshore rig market commentary.

Phone Get Bassoe Analytics on your phone! Stay updated on the go with our free mobile app.