Bassoe Rig Analytics weekly rig market round-up (week 5)
In case you missed it, you can access our previous Rig Market Round-Up here.
Announcement
We are pleased to announce that Bassoe Rig Analytics has launched a supply and demand forecasting application. Bassoe Demand Analytics gives you access to a 10-year model for forecasted demand and utilization, which is based on active contracts, known rig requirements, additional estimated demand and estimated supply. Users can see monthly demand/supply figures and backlog for known requirements by region and rig type. Users can also access and filter our list of known requirements which includes tenders, pre-tenders, planned, and possible programs. If you're interested in gaining access to Demand Analytics, please contact Barry Young.
Market Commentary
Bassoe Rig Analytics has released its latest commentary: Rig demand surge in Guyana-Suriname Basin as oil majors ramp up exploration and production. The South American rig market, led by Brazilian NOC Petrobras, has encountered its fair share of problems over the past years. The 2014 oil price crash and Brazilian Car Wash corruption scandal made their mark on offshore rig demand and utilization. However, while the Coronavirus pandemic and new oil price crash has led to lowered global demand and a glut of offshore rigs, the South American market seems to be bucking this trend thanks not only to Brazil but from increasing activity in the infantile Guyana-Suriname basin.
Rig Contracts
Maersk Drilling has secured an additional two-well contract for the low-emission jackup Maersk Integrator with Aker BP. The plan is that in direct continuation of the rig’s previously announced work scope with OMV, Maersk Integrator will return to Aker BP’s Ivar Aasen field for a two-well campaign expected to commence in Q3 2021. The contract has an estimated duration of 73 days and a contract value of approximately USD 19.5 million, excluding integrated services provided and potential performance bonuses.The ultra-harsh environment jack-up rig is currently completing a series of upgrades to turn it into a hybrid, low-emission rig. The upgrades are supported by a grant from the Norwegian NOx Fund and a separate compensation scheme agreed with Aker BP rewarding reductions in fuel consumption and reduced emissions.
PetroVietnam Drilling and Well Services Corporation (PV Drilling) has signed a contract to supply jackup PV Drilling III for Nhat Viet Petroleum Company Limited (JVPC) . The rig will drill three wells, with an additional one-well option available. The unit will operate in Lot 15–2, off the coast of Vietnam.
Vantage Drilling drillship Platinum Explorer has received a letter of award for a two-year contract from Oil and Natural Gas Company (ONGC) off India. The rig is currently performing under an existing three-year contract with ONGC, which is expected to conclude in the second quarter of 2021. Expected revenues over the new two-year contract term, exclusive of service tax, are approximately $109 million.
Icon Offshore jackup Perisai Pacific 101 has been awarded a contract from Petrofac for a drilling campaign offshore Malaysia. The contract is expected to commence in April 2021 for a period of 180 days covering eight firm wells, and with an option for three wells thereafter. The award value is approximately USD 13.3 million.
Maersk Drilling drillship Maersk Venturer has received a conditional letter of award from Tullow for a development drilling campaign at the TEN and Jubilee fields offshore Ghana. The duration of the final contract is around four years with expected commencement in Q2 2021. The estimated value of the final contract is approximately USD 370 million, excluding the value of potential additional services provided and performance bonuses. The final contract has a progressive day rate structure for the full duration of the contract. However, after the initial period of 18 months, the contract has a provision to shift to a market-linked day rate structure.
Energy Drilling Management Pte Ltd (EDMPL) has entered into a Management Agreement with Seadrill Partners LLC (SDLP) to maintain, market and operate the tender rigs Seadrill-T15, Seadrill-T16 and West Vencedor, on their behalf, effective 3rd February 2021. After the transaction, EDMPL will effectively market and eventually operate a fleet of six tender rigs comprising of four barge-type and two semi-submersible type tender rigs. The rigs are preserved in Singapore, Malaysia and Indonesia and plans are in place to transition the rigs from Seadrill Management to Energy Drilling Management. The rigs will be actively marketed by EDMPL to Operators in the region and West Africa who are familiar with the deployment of tender rigs for development drilling on fixed platforms in shallow waters and Spars and TLPs in deep-waters.
Drilling Activities & Discoveries
Equinor has made an oil and gas discovery with it Rover North exploration well in PL 923, near the Troll field, offshore Norway using Seadrill harsh-environment semisub West Hercules. Appraisal well 31/1–2 A struck sandstones with good to moderate reservoir quality in the Etive formation and upper part of the Oseberg formation. The well proved 12 metres of oil in the Etive formation, where the oil/water contact was not encountered, and a 17-metres oil column in the Oseberg formation. The licensees consider the discovery commercial, and will explore development solutions in towards existing infrastructure. The water depth at the site is 349 metres. The well has been permanently plugged and abandoned and the rig will now drill exploration well 31/2–22 S in production licence 090 in the northern North Sea.
Harsh environment semisub Deepsea Yantai will drill well 34/4–16 S in PL 882 for Neptune Energy after drilling development wells at the Gjoa Field. Neptune Energy was granted a drilling permit this week for the well by the Norwegian Petroleum Directorate.
Equinor has been granted drilling permits by the NPD for the wildcat well 31/11–1, located in production licence 785 S south of the Troll field. The wildcat well will be drilled by Odjfell Drilling harsh-environment semisub Deepsea Atlantic. Equinor is the operator, with an ownership interest of 50%, while Total E&P Norge holds the last 50%. This is the first exploration well to be drilled on the licence. Equinor also plans to use the semisub Deepsea Atlantic to P&A well 34/7-J-4 on the Tordis Field, PL 089.
Petrobras hit oil in exploration well 1-BRSA-1377-RJS, informally called Urissane, in block C-M-411, in the Campos Basin pre-salt. The block is operated by Petrobras, which holds 50% interest, while partner ExxonMobil holds the remaining 50%.
Lundin Energy Norway has concluded drilling of wildcat well 7219/11–1, located in PL 533 B, and the well has been classified as dry. The well was drilled by harsh-environment semisub West Bollsta, which will now proceed to PL 359 to drill wildcat well 16/4–13 S. Lundin is the operator of both PL 533 B and PL 359.
Protexa has concluded drilling of the Yaxche 44 well offshore Dos Bocas, using jackup TZ301–1. The shallow water work in the Gulf of Mexico began on December 19 and finished just a month after. The company will now continue to work on other wells in Cluster 4: Yaxche 111, Yaxche 15, Yaxche 121 and Yaxche 600.
Jackup Shelf Drilling Tenacious will relocate to drill the Zakhera Prospect in block 50, offshore Oman, after completion of exploration well Yumna-3. The exploration well is targeting a structure that looks similar to the Yumna field.
Oil Price
Oil prices increased this week to the highest seen since February 2020 and as of early Friday Brent Crude was close to $60 per barrel and WTI just under $57 per barrel. The increase comes after Opec+ agreed to extend its oil supply agreement at existing levels, improving unemployment figures, higher factory orders as well as news that the US Congress have taken the first steps toward advancing President Joe Biden's proposed $1.9 trillion coronavirus aid plan.
Energy Transition
The Irish Minister for Environment, Climate and Communications, Eamon Ryan TD, has obtained Cabinet approval to introduce legislation to ban licences for new oil and natural gas exploration. The legislation will be included in the Climate Action and Low Carbon Amendment Bill which will go before the Oireachtas shortly.
COSL Drilling Europe and suppliers Kongsberg and NOV joined forces to generate environmental and financial savings of more than 25% in offshore drilling operations. COSL Drilling's "Energy Control“ project aims to reduce GHG emissions while at the same time reducing maintenance costs and fuel usage for engines and generators. COSL invited Kongsberg and drilling specialists NOV to work together to achieve these goals. Both companies already had individual solutions to improve power consumption and generation efficiency: Kongsberg could provide smarter ways to control energy production, and NOV could optimize the use of the available energy. Integrating these technologies has provided a holistic solution, now deployed on board harsh-environment semisubs COSLPromoter and COSLInnovator.
Stena Drilling has entered into a strategic framework agreement for Decarbonisation Exploration with UK based dCarbonX to support the development of offshore “GeoEnergy” resources. Both parties are interested in offshore Decarbonisation Exploration drilling as a new, innovative, and sustainable enabler of the Energy Transition. The companies will work together to engineer solutions to discover and develop subsurface assets for combinations of geothermal energy, molecular energy storage, and carbon sequestration.
Financial News
Seadrill has announced that it has entered into a forbearance agreement with certain creditors in respect of nine out of the group's twelve senior secured credit facility agreements. The purpose of the forbearance agreement is to allow the Company and its stakeholders more time to finalize 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. The Company continues to evaluate capital structure proposals from its financial stakeholders; whilst no agreement has been reached at this point it is expected that potential solutions will lead to significant equitization of debt which is likely to result in minimal or no recovery for current shareholders.
Other Industry News
Earlier this week, Drillship Valaris DS-4 broke free from moorings off the North Ayrshire coast of Scotland and drifted without power while eight crew were onboard. A rescue operation was successfully done to secure the drillship. Valaris DS4 was moored at Hunterston Terminal when the incident happened and no reports of any injuries as a result of the incident.
Awilco Drilling PLC announces that Jens Berge, Chief Executive Officer, has decided to leave the Company with effect from 1 February to pursue other opportunities. Eric Jacobs, General Counsel in the Awilhelmsen Group, will act as interim Chief Executive Officer until the Board of Directors appoints a permanent replacement.
EnQuest has signed an agreement to acquire equity interest in the Golden Eagle Development in the UK North Sea. The Company signed the agreement with Suncor Energy UK to purchase Suncor's entire 26.69% non-operated equity interest in the Golden Eagle area, comprising the producing Golden Eagle, Peregrine and Solitaire fields for an initial consideration of USD 325 million.
Woodside Petroleum has put activity on hold in Myanmar after the military seized power in the country and detained elected leader Aung San Suu Kyi. The Australian company has been working with Total and MPRL E&P to develop Myanmar's first ultra-deepwater gas project, A-6. Since 2014, Woodside has invested more than USD $400 million.
Petrobras informs that it has signed with the companies OP Energia Ltda. and DBO Energia S.A. a contract for the sale of the totality of its participations in the production fields of Peroá and Cangoá, and in the concession BM-ES-21 (Malombe Discovery Evaluation Plan), jointly named Peroá Cluster, located in the Espírito Santo Basin. OP Energia and DBO Energia will form a consortium to acquire the Peroá Cluster, with a 50% stake each, with the first company as operator. The sale value is US$ 55 million, being (a) US$ 5 million paid at the present date; (b) US$ 7.5 million at the closing of the transaction and © US$ 42.5 million in contingent payments foreseen in contract, related to factors as commerciality declaration of Malombe, future oil prices and extension of the concessions term. The amounts do not consider due adjustments until the closing of the transaction, which is subject to the fulfillment of previous conditions, such as approval by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
INPEX Corporation has acquired additional interest in Lucius and Hadrian North Fields in US Gulf of Mexico. The Japanese oil company acquired a portion (2.3546 percent) of the participating interest (23.29512 percent) in the Lucius and Hadrian North fields previously held by ExxonMobil. This acquisition increases INPEX’s participating interest in the Lucius and Hadrian North fields from 7.75309 percent to 10.10769 percent. Occidental holds operatorship.
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Data: Bassoe Analytics, Image attribution: Seadrill
