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Stena Drilling has signed a new contract with Petrofac for provision of mid-water semisub Stena Don. Operations are due to commence between 1st July 2021 and 31th July 2021, for the drilling of one firm well with an estimated duration of 76 days in the UK Continental Shelf for an as yet undisclosed operator. The rig has been idle since completing a drilling campaign with EnQuest UK in July 2020.
Lundin Energy Norway and Odfjell Drilling have signed a letter of intent for the use of harsh-environment ultra-deepwater semisub Deepsea Stavanger. The letter of intent is subject to finalization of contract and final approvals from involved parties. The contract is set to commence in Q3 2021 with a duration of one firm well plus eight optional wells. The firm contract scope has an estimated contract value of approximately $11–14 million plus incentives. The contract is set to commence in Q3 2021, back-to-back with Deepsea Stavanger's upcoming five well contract with Aker BP.
Jackup Admarine V has secured a new contract for work in the Gulf of Suez with an unknown‚ top-tier client‘. The contract is planned to commence in February 2021 and covers a firm six-month period with option to extend for an additional six months thereafter.
Tullow Oil has secured a drilling rig to drill offshore Ghana, with work to commence in Q2 2021. The operator last used ultra-deepwater drillship Maersk Venturer for its operations in the region and the rig is currently available in Las Palmas, Canary Islands.
Total is understood to be in the end stages of securing a contract for the provision of an ultra-deepwater drillship to undertake its exploration campaign in the Brazilian Campos Basin, within Block C-M-541. Work is likely to begin in Q2 2021.
Drilling Activities & Discoveries
Neptune Energy has commenced drilling at the Seagull development in UK waters using jackup Valaris JU-248 (ex-Rowan Gorilla VI). The campaign consists of 4 high-pressure, high-temperature wells and will keep the unit working for 18 months.
Harsh-environment semisub COSLInnovator is scheduled to commence drilling activities during the second half of February. The semisub is on contracted to Chrysaor Norge, which was recently given consent for the two exploration wells 15/12–25 and 15/12–26. Well 15/12–15 has start-up due in February 2021 and will take approximately a minimum 31 days, while well 15/12–26 will start-up in March/April 2021 and the estimated duration is at least 25 days.
Drillship Stena Forth has arrived at its drilling location offshore Suriname and will commence spudding of the exploration well Gloathberg Voltzberg North-1 (GVN-1) in the next few days. The operator of Block 47, Tullow Oil, is targeting 235 million barrels of oil.
Lundin Energy has completed drilling of exploration well 7219/11–1, targeting the Bask prospect in license PL533B, in the southern Barents Sea, northwest of the Alta discovery. The targeted formation contained poorly developed reservoir and is not considered commercial and the well is classed as dry. The Bask well was drilled by harsh-environment semisub West Bollsta. The rig will proceed to drill the Lundin Energy operated segment D prospect in PL 359.
Vantage Drilling jackup Topaz Driller has completed its maintenance project at the MMH Malta yard ahead of a new contract with ENI off Montenegro. The jackup has been in-port for a four-month maintenance program.
Murphy Oil says that it has been advancing the Khaleesi, Mormont and Samurai project in the US Gulf of Mexico, ahead of the 2021 drilling campaign, with first oil remaining on target for mid-2022. Murphy Oil has an upcoming contract in place for use of Pacific Drilling ultra-deepwater drillship Pacific Sharav, covering 10 firm wells plus options and running from May 2021 until August 2022.
Ultra-deepwater drillship Fatih has reached the Turkali-2 well site on the Sakarya Gas Field, in the Turkish Black Sea, and will soon begin drilling for TPAO.
Harsh-environment semisub Deepsea Stavanger has arrived in Norway after mobilizing from South Africa. The semisub will operate for Aker BP and is scheduled to commence work in April.
Japan Drilling Company semisub Hakuryu-5 is mobilizing from Singapore to Myanmar to commence a new 280-day contract with PTTEP. The contract had been due to begin in Q2 2020 but faced delays from the Covid pandemic.
FAR Ltd says that it now plans to drill its Bambo-1 wildcat well offshore the Gambia in the second half of this year, after putting the drill on hold last year. Most long-lead items for the Bambo-1 well have been ordered and the Environmental and Social Impact Assessment (ESIA) for the project has been approved by the National Environmental Agency in The Gambia. FAR has engaged Exceed to provide engineering and wells management services to deliver the well effectively. It is understood the operator will require a floating rig for the campaign.
Plans to drill the Atum-1X exploration well offshore Guinea-Bissau remain on hold after news that operator Svenska Petroleum is to be acquired by PetroNor E&P AS (subject to necessary government approvals), along with challenges from the Covid-19 pandemic. Licence partner, FAR, is working with operator to understand when operations for drilling Atum-1X can restart. A drillship will be required to undertake the campaign.
Santos is planning to drill the Dancer-1 well in the WA-1-P permit, in the Commonwealth waters offshore Australia. Drilling will be carried out with a jackup in around 63m of water and will take around a month to complete, but a contingency for up to 75 days is provided to account for unfavorable weather, additional drilling, or operational challenges. A sidetrack or re-spud is not planned as part of the activity but is included in the contingency. Work should commence in Q4 2021.
Melbana Energy says that it is continuing farm-out talks to secure a partner ahead of drilling the Beehive prospect offshore Western Australia. The operator is required to drill a well at the licence before the close of 2021. Melbana estimates that the prospect could contain over 400 million barrels.
Murphy Oil says that it has farmed into an attractive play-opening trend‘ with Chevron as operator, and the first well is planned to target the Silverback prospect within Mississippi Canyon 35. The acreage is located adjacent to a large position held by Murphy and its partners.
Newbuilds & Rig Sales
Petrobras informs that it has received a notification from the Sete Brasil in which: (a) it indicates that will not comply with certain conditions set forth in the agreement that should be fully met by January 31, 2021; and (b) requests the beginning of a new negotiation with Petrobras. Therefore, in face of this scenario and in search of a joint solution, considering that the agreement will not have the expected effects, the Executive Board of Petrobras authorized the beginning of a new negotiation with Sete Brasil. The company will keep the market informed about the eventual result of the negotiation. To remind, in the original arrangement from March 2018, Petrobras planned to contract the four remaining Sete Brasil deepwater units for 10 years each and at a day rate of USD $299,000 per day. Magni Partners, Mubadala Investment Company (MIC), and Etesco later agreed to participate in Sete and to help progress the deal.
Vantage Drilling ultra-deepwater drillship Titanium Explorer has now been confirmed to have been sold for recycling.
ISOICO is to build the first Iranian-made jackup for North Drilling Company (NDCO) after a memorandum of understanding (MOU) was signed by the companies during the 25th edition of the Iran International Oil, Gas, Refining, and Petrochemical Exhibition. The two companies will cooperate in designing and constructing the jackup, which will be operating in the Persian Gulf.
Norwegian press reports suggest that ultra-deepwater drillship Bolette Dolphin is reported to be close to being sold to TPAO (Turkish Petroleum) for its own operations. The drillship is currently cold stacked in Norway.
In its recent market update, Keppel Corporation has confirmed that as part of its planned transformation, it will exit the offshore rig building business. Keppel O&M’s yard operations will be streamlined and will also explore how its offshore rig technology can be repurposed for other uses. Keppel will also address the S$2.9 billion of legacy completed and uncompleted rigs on its balance sheet by ring-fencing them and putting them under a Rig Co and a Development Co (Dev Co) respectively. Completed rigs in the Rig Co will be put to work or monetized if there are suitable opportunities. When the oil market improves, utilization and day rates increase and the rigs generate steady cashflow, it will sell the rigs or explore bringing in third party investors. When the Rig Co is cashflow generating, it can also be monetized or spun off. The Dev Co will focus on completing the uncompleted rigs, while prudently managing cashflow. The company says that it will focus on completing rigs that have firm contracts with customers and completed rigs will either be delivered to customers, or transferred to the Rig Co and put to work or sold. Both the Rig Co and Dev Co are transient structures and are projected to need about S$500 million in net funding from the Group, mainly to complete the rigs. This funding will be provided over time, and repaid as the rigs are put to work or monetized.
Following Borr Drilling's update last week regarding delaying its five newbuild jackups under construction with Keppel, the builder has released more details. Keppel is entitled, any time prior to delivery, to sell any of the undelivered units to a third party, conditional upon Keppel notifying Borr of the intent to sell and giving Borr the opportunity to purchase the rig. In addition to the units under construction, Borr also owns four idle jackups that were previously delivered from Keppel which have never yet worked.
Odfjell Drilling will retrofit its newest deepwater semisubs in the North Sea with the Siemens Energy BlueDrive DC-Grid system. The selected semisubs include Deepsea Atlantic and Deepsea Nordkapp, with the possibility to include Deepsea Stavanger, Deepsea Aberdeen and Deepsea Yantai thereafter. The upgrades aim to set a new technological standard in the company's strategy towards zero-emission drilling. The Siemens Energy BlueDrive DC-Grid solution consists of DC/DC converters connected to the existing four drilling drive DC buses from one side and to DC/DC converters connected to energy-storage systems. This allows platform operators to conduct peak shaving of drilling loads, so fewer generator sets can run at higher and steadier loads, reducing fuel consumption and carbon emissions, improving sustainability, and minimizing a rig’s carbon footprint. Further, the solution will increase the power plant's reliability by reducing blackouts, which will prevent downtime and boost asset utilization.
Diamond Offshore Drilling has announced that it has entered into a plan support agreement with holders of over 70% of each of its senior unsecured notes and revolving credit facility loans regarding a financial restructuring transaction that will significantly deleverage the Company's balance sheet and position the Company for future growth. As previously disclosed in the Company's press release dated April 27, 2020, Diamond and certain of its subsidiaries filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The plan support agreement outlines a comprehensive plan for deleveraging the Company's balance sheet through the equitization of its senior unsecured notes, resulting in a reduction of over $2.1 billion of funded indebtedness. In addition, certain holders of senior unsecured notes have agreed to invest up to $110 million of new capital in the form of first lien, last out exit notes, while certain holders of revolving credit facility loans have agreed to provide exit financing facilities in the form of (a) a $300 million to $400 million first lien, first out revolving credit facility and (b) a $100 million to $200 million first lien, last out term loan facility.
Other Industry News
President Joe Biden has signed a new list of executive actions in a bid to combat climate change, including pausing new oil and gas leases on federal land and cutting fossil fuel subsidies.
Premier Oil has completed the farm down of its interest in the Tuna PSC, Offshore Indonesia, to Zarubezhneft. Under the farm down agreement, Zarubezhneft will carry Premier for its share of a two-well campaign to appraise the Tuna discoveries, scheduled to commence in Q2 2021. In addition, the two partners have secured Indonesian government approval for a one year extension to the exploration period of the Tuna PSC to March 2022. Premier Oil remains operator of the Tuna PSC, with the Company and Zarubezhneft each having a 50% interest in the license.
A fatal incident was reported aboard Seadrill ultra-deepwater drillship West Neptune in the U.S Gulf of Mexico. Drilling activities have been suspended and an investigation will be launched. The rig is currently on contract with Kosmos Energy.
New Age has received formal approval to apply for a new Etinde Exploitation Agreement (EEA) for the Etinde offshore block. This will replace the existing EEA which came into force by Presidential decree in January 2015, and the new exploitation agreement will be for the production of hydrocarbons including the delivery of gas to thermal power plants or any other projects confirmed by the State.
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Data: Bassoe Analytics, Image attribution: Stena Drilling