Bassoe Rig Analytics weekly rig market round-up (week 2)

Bassoe Rig Analytics weekly rig market round-up (week 2)
This week we have seen some increased activity in the North Sea including new contracts for Borr Drilling and Maersk Drilling, meanwhile drillship Noble Sam Croft hit hydrocarbons off Suriname while drilling for Apache and Total.

In case you missed it, you can access our previous Rig Market Round-Up here. 

Rig Contracts 

In its latest fleet update, Borr Drilling revealed that jackup Prospector-1 has had its current contract with ONE-Dyas extended by one well keeping it busy until March 2021. The rig has also been awarded a new four-well deal with an undisclosed operator in the North Sea that will begin in April and last until October 2021. Meanwhile, jackup Idun has been awarded a new LOA for work in Asia with operations to commence in the first quarter of 2021 and lasting up to one year, excluding options. Additionally, the previously announced LOI for jackup Norve, which is currently warm stacked, has been converted into a contact for two wells plus one option with BW Energy, which is expected to commence in Gabon during April 2021. Borr says that these deals will add USD 35.1 million over approximately 480 days to the total backlog, with good prospects for additional backlog on these units.

Harsh-environment jackup Maersk Resolve has been awarded a contract from Spirit Energy to drill a development well at the Grove North East field in the UK North Sea. The contract has a duration of 131 days, with a one well P&A option, and is expected to commence in March 2021.

Pacific Drilling ultra-deepwater drillship Pacific Khamsin has been awarded a firm one-well contract with Petronas Mexico, commencing in Q3 2021 and lasting until Q4 2021. The deal also comes with two priced option wells and two additional option wells at market rates. The $192,000 dayrate for the firm well is inclusive of a lump-sum mobilization fee amortized over the firm contract period.

Maersk Drilling has received a notice of early termination for convenience of a one-well contract with Dana Petroleum Denmark B.V. The contract was first announced in Maersk Drilling’s May 2020 Fleet Status Report. The driller expects to receive compensation in the form of a termination fee. The contract had previously been deferred from the date of originally expected commencement.


Drilling Activities & Discoveries

Transocean ultra-deepwater semisub Deepwater Nautilus has completed its contract with Petronas Malaysia and has now moved inshore. The rig commenced work with the operator during June 2020. 

Further to earlier Bassoe Rig Analytics reports, it is now confirmed that Noble jackup Noble Hans Deul is expected to start development drilling at the Blythe and Elgood fields in early Q2 2021 for Independent Oil & Gas. The fields are part of the Core Project, which IOG operates. Located in the UK Southern North Sea, the Core Project – phase 1 entails the development of three fields: Southwark, Blythe and Elgood.

Aker BP plans to begin drilling the exploration well 7234/6–1, targeting the Stangnestind prospect, within license PL 858 in 15 May 2021 at the earliest, using Odfjell Drilling-managed harsh-environment semisub Deepsea Nordkapp. Aker BP first applied to drill the well in November 2019, but the operation was delayed due to Covid-19 issues.

The Canada-Newfoundland & Labrador Offshore Petroleum Board (CNLOPB) estimates recoverable oil volumes from Equinor’s Harpoon discovery to be 40 million barrels. The exploration well, Harpoon O-85, was drilled in October 2020.

The Norwegian Petroleum Directorate (NPD) has granted Chrysaor Norge drilling permits for wildcat well 15/12–25 and 15/12–26, both located in PL 973. The exploration wells will be drilled by the harsh-environment semisub COSLInnovator and will target the Jerv and Ilder  prospects.

BP and its partners have completed plug & abandonment of the Ironbark-1 exploration well, located in Carnarvon Basin offshore Western Australia, after the well was found to be dry. The wildcat was drilled by the Diamond Offshore semisub Ocean Apex, which has now moved off location.

MOL Norge has spudded the Norwegian 2/9–6 S exploration well targeting the Eidsvoll prospect in PL 617, using jackup Maersk Integrator. The rig also has contracts in place for campaigns with Aker BP and OMV this year. 

Total and Apache has made a significant discovery at the Keskesi East-1 exploration well in Block 58, offshore Suriname. Noble ultra-deepwater drillship Noble Sam Croft drilled the well and will continue drilling operations for deeper Neocomian aged targets. On completion, the drillship will move to Guyana where it will commence development drilling for ExxonMobil.


Rig Mobilizations

Seadrill ultra-deepwater drillship West Saturn has moved offshore Brazil to commence its new drilling campaign with ExxonMobil. The contract covers exploration drilling, with wells understood to be planned at the Opal and Titan prospects, that will keep the drillship busy at least until June 2021 with options available for extension thereafter.

Harsh-environment semisub Deepsea Stavanger is continuing its journey from South Africa, where it last drilled for Total, to Bergen, Norway. It is expected to arrive in around a week’s time. The semisub is scheduled to commence drilling for Aker BP later this year under a deal that will keep it busy until at least Q3 2021.

Jackup Valaris JU-248 has now moved offshore the UK for Neptune Energy as planned where it will undertake development drilling at the Seagull field until at least mid-2022. 

Ultra-deepwater drillship Stena Forth has commenced mobilization from Las Palmas, Canary Islands, to Paramaribo in Suriname ahead of beginning a new exploration campaign with Tullow Oil in the coming weeks. The rig will be used to drill the Goliathberg Voltzberg North wildcat in Block 47. 


Rig Demand

Energean Oil and Gas has confirmed plans for its 2022 five-well Israel drilling campaign. The operator will undertake appraisal of the potential oil rim that was identified as part of the Karish development drilling campaign plus exploration of further prospective gas and liquids volumes within the Karish lease. The operator will also drill the Athena prospect in Block 12 and success at Athena would significantly de-risk the remaining 88 Bcm (3.1 Tcf) of prospective resources in the block. Any discovery in that block would be prioritised over the development of Tanin. Additional prospects arealso being assessed in Energean Israel's remaining exploration blocks.It is understood that the operator has already approached the market for a floating rig to work at the project. 

BHP, Equinor, and Chevron have received the greenlight for three offshore exploration drilling projects in Canadian waters. The projects are located in BHP’s licenses in the Orphan Basin, Equinor’s licenses in the Central Ridge Area, and Chevron’s license in the Flemish Pass.

A significant new prospect has been mapped offshore Timor-Leste at the SundaGas-operated Chuditch PSC, named Chuditch North East. The prospect is mapped to be in the same reservoir and structural setting as the previously discovered Chuditch-1 discovery and other prospects identified by former operator Shell. The PSC lies in water depths of 50 to 80 metres, east of the Bayu-Undan field and south of the Greater Sunrise discoveries.

NewAge is working with Envoi on a farm-out process to bring a third party to the Algoa-Gamtoos license to fund the next stages of 3D seismic acquisition and potentially a new well on the license. The license is currently held 50% by NewAge and 50% by Tower Resources. 

BW Energy has increased its working interest in the Kudu license offshore Namibia from 56% to 95%. The Kudu gas field is located about 130 km offshore the southern parts of Namibia. It contains an estimated 1.3 TCF of gas (P 50) and was discovered in 1974. The new arrangement will enable gas sales arrangements and increases the likelihood of securing financing for the upstream Kudu development. It is understood that the development drill at the field would consist of around 3 wells using a semisub. 

Further to our previous reports, Vaalco Energy is now understood to have approached the market regarding jackup availability for further exploration drilling at its Gabon assets, starting in the final quarter of this year. 


Newbuilds & Rig Sales 

Lamprell PLC has announced that the two newbuild jackups ordered by International Maritime Industries (IMI), ARO S116E-1and ARO S116E-2 are progressing with fabrication of hull, cantilever and leg sections well underway. Meanwhile, the company completed a total of 16 rig refurbishment projects in 2020 with more projects underway.


Energy Transition

Norway plans to triple its national tax on carbon dioxide (CO2) emissions by 2030 to reach its climate goals. The cost of emissions will increase from NOK 590 per ton today to NOK 2,000 per ton by 2030. The industry is worried that the increased cost will reduce competitiveness on the Norwegian Continental Shelf, even if the government promises to lower other taxes and levies. Norway is western Europe’s largest oil & gas producer and the country aims to cut greenhouse gas emissions by 50% by 2030 (compared to 1990 levels).


Financial News 


Seadrill New Finance Limited, a company incorporated in Bermuda in 2018 and issuer of the 12.0% senior secured notes due 2025, has determined not to make the semi-annual 4% cash interest payment due to the senior secured noteholders on 15 January 2021 in respect of their Notes issued pursuant to the terms of the notes indenture dated 2 July 2018. The payment-in-kind (PIK) interest payment is being made in the ordinary course. Discussions continue between Seadrill Limited and its creditors and/or their advisers to finalise negotiations on the head terms of a comprehensive restructuring of its balance sheet. Such a restructuring may involve the use of a court-supervised process.


Oil Price


On Friday, oil prices decreased due to worries regarding increasing Covid-19 lockdowns in China, which is dampening a rally in prices seen over the past week due to strong import data from the world's biggest crude importer and US plans for a large stimulus package. 

Other Industry News

BP has relaunched the sale of some North Sea oil fields that it had previously agreed to sell to Premier Oil. BP and Premier Oil signed Sale and Purchase Agreements (SPAs) back in June 2020 for BP’s interests in the Andrew Area and its Shearwater assets. Premier agreed to pay USD 200 million on completion, with an additional USD 115 million payable based on higher future oil and gas prices. However, Premier Oil abandoned its plans to buy the North Sea assets after the company was acquired by Chrysaor.

Energean has acquired Total’s 50% interest in block 2, offshore Greece. The oil and gas company now holds 75% interest in the block, which includes the 25% interest Energean bought through the acquisition of Edison E&P. Hellenic Petroleum holds the remaining 25%.

Equinor and YPF, have agreed to sell their jointly held non-operated stakes in the CAN 100 block offshore Argentina. The companies plan to sell 30% of the non-operated interests to oil major Shell. Post-transaction Equinor and YPF will hold 35% each and Shell will hold the remaining 30% of the block. The CAN 100 block is the largest block in the North Argentinian Basin and comprises an area of 15,000 km2.

The U.S. has added Chinese oil giant CNOOC to a blacklist, accusing them of using coercion against states with rival claims in the South China Sea. The Commerce department added CNOOC to a list that requires firms to be granted a special license before they can receive exports of high-tech items from U.S. suppliers.


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Data: Bassoe Analytics, Image attribution: Pacific Drilling. 

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