Esgian Rig Analytics Market Roundup (Week 50)

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

Contracts & tenders

Odfjell Drilling, on behalf of CIMC OFFSHORE, has agreed to extend the contract with Neptune Energy Norge for the use of the 3,900-ft drilling rig Deepsea Yantai to drill two further firm wells in Norway. This latest scope of the work is estimated to take 60 days and is scheduled to begin in direct continuation of the two wells contracted with Neptune Energy Norge, as announced on 11 October 2022. This previously announced scope is scheduled to start in Q3 2023. As a result of the signing of this extension, the backlog for the Deepsea Yantai is now expected to be pushed back to the start of Q2 2024. The rig has recently drilled the Calypso well in the Norwegian Sea for Neptune Energy, confirming the discovery has commercial potential. This was Neptune’s third discovery on the Norwegian Continental Shelf in six months.

TotalEnergies has launched tenders and intends to select a rig for drilling operations on Block 9 offshore Lebanon in the first quarter of 2023. TotalEnergies and its partner ENI are aiming to complete drilling as soon as possible in 2023. TotalEnergies is the operator of Block 9 with a 60% interest while Eni holds a 40% interest. The partners will initiate exploration of a previously identified prospect which may extend both into Block 9 and into Israeli waters south of the recently established Maritime Border Line between Israel and Lebanon. Preparations began earlier this year. TotalEnergies has confirmed that teams in charge of drilling operations have been mobilized, pre-orders have been placed with suppliers for a required equipment and environmental studies for the well are to be finalized by the end of June 2023. 

Ocyan has finalized charters for three of its rigs that were winners in a tender from Petrobras for a total of up to eight floating rigs. Each of Ocyan’s rigs – semisub Norbe VI and drillships ODN I and ODN II – received 1,095-day charters plus an option for the same period. ODN I and ODN II were awarded under Lot 2, while Norbe VI was awarded under Lot 3. Norbe VI is currently working for PetroRio under an agreement that runs until August 2023. Meanwhile, ODI I is under a previous contract to Petrobras that finishes in January 2023, and ODN II is working for Petrobras under an agreement that lasts until December 2023. All three rigs will commence their new charters after finishing their existing commitments. More here…

Noble Corp. has been awarded a contract from BP to provide the ultra-harsh environment jackup rig Noble Innovator for drilling and plugging and abandonment services in the UK sector of the North Sea. The contract is expected to begin in May 2023, with a firm duration of one year. The firm contract value is approximately $50 million. The contract contains a one-year option with a potential contract value of approximately $58 million.The Noble Innovator, previously known as Maersk Innovator, is currently operating in the UK North Sea for Harbour Energy. Following the completion of its current contract, the rig is scheduled to undergo a special periodic survey before starting the contract with BP.

Aquadrill has confirmed new work for drillship Vela that adds 150 days of backlog to the rig’s workload at a contract value of about $60 million. Diamond Offshore will continue to manage the rig for this assignment, which is with BP for work in the US Gulf. As part of the arrangement, the upcoming campaign with Beacon will be split into two parts. Beacon’s work will still begin in January, but the operator will only drill one well under its minimum 225-day charter. Vela will then undertake this new assignment, which includes MPD, before resuming work with Beacon in August. Beacon’s agreement also has options for up to 5-7 wells. The firm backlog for Vela will now keep the rig working into early 2024.

Diamond Offshore has finalised its 1,460-day charter with Petrobras for semisub Ocean Courage. The award was made under the operator’s tender for up to eight floating rigs. A total of seven rigs were selected, and all of the contracts have now been finalised. The charter for Ocean Courage is set to begin in Q4 2023. The rig is already working for Petrobras under an agreement that began in June 2021 and is set to finish in Q3 2023. This latest award locks up Ocean Courage until Q4 2027.

Valaris has confirmed the award of four contracts for three of its jackup rigs in the North Sea. Valaris confirmed that the heavy-duty harsh environment jackup Valaris 123 had won a 90-day contract with Kistos in the Dutch North Sea. The contract started in November 2022. Furthermore, the Valaris 123 has secured a 195-day contract with ONE-Dyas, also in the Dutch North Sea. The contract is expected to start in the first quarter of 2023 in direct continuation of the rig’s current contract with Kistos. The rig will use its selective catalytic reduction (SCR) system during both of these contract to reduce NOx emissions. Another heavy-duty harsh environment jackup, the Valaris 121, has won a 210-day contract with Shell in the UK North Sea. The contract is expected to begin early in the fourth quarter of 2023. The expected total contract value is over $25 million. The contract has four priced options. Also, the heavy-duty ultra-harsh environment jackup Valaris 247 has secured a 180-day contract with Perenco in the UK North Sea. The contract is expected to start in the first quarter of 2023. It has one 60-day option.

Drilling Activity and Discoveries

Northern Ocean’s 7,500-ft semisubmersible drilling rig, Deepsea Bollsta, has completed the transit to Namibia and started its contract with Shell. The rig’s first assignment is to drill the Jonker-1 well. The contract, announced in late August 2022, has a firm duration of twelve months and an option to extend for six months. Following the reactivation period and contract preparations, the rig started its journey from Norway in early November and, after a short stop in Las Palmas, it reached Walvis Bay in Namibia in late November. Odfjell Drilling prepared the rig for the contract and provides operations management during its term. Earlier this year, Shell successfully drilled the exploration well Graff-1 in the Orange Basin with drillship Valaris DS-10. The discovery is thought to hold up to 2 billion barrels of oil equivalent.

Demand

Guyana has launched its first competitive offshore oil and gas licensing round. As previously reported, 14 blocks are on offer in shallow and deepwater areas. The round is scheduled to close on 14  April 2023, followed by the issue of awards by 31 May 2023 after bid evaluation and negotiation. The terms include contractual commitments and relinquishment obligations aimed at encouraging development, fiscal terms that the Ministry of Natural Resources says will provide a greater balance of revenue shares between the government and licence operators, and separate qualification requirements for shallow and deepwater licences, among other terms.

Tullow Oil has signed a production sharing contract for CI-803, an exploration licence in the Tano Basin offshore Côte d’Ivoire. CI-803 covers an area of 1,345 square kilometres and is adjacent to licence CI-524 which is also held by Tullow. Tullow will operate the licence with a 90% interest. PetroCi holds the remaining 10% interest. Tullow’s work programme for CI-803 over the intial two and a half years includes reprocessing of existing 3D seismic data, along with prospect evaluation. On the adjacent CI-524, a number of drill candidates are being matured while Tullow continues to prepare to drill an exploration well during 2024.

Israel’s Ministry of Energy has launched its 4th Offshore Bid Round (OBR4) for hydrocarbon exploration offshore Israel. The area offered in this round includes 20 exploration blocks totalling an area of 5,888 km2. Blocks on offer include three blocks in Zone E, six blocks in Zone G, five blocks in Zone H and six blocks in Zone I. Bidding and work programs will be accepted for entire zones but licences within the zones will be granted for specific blocks. The working period for the blocks offered includes two drill-or-drop decision points after three and five years and it may be extended up to seven years from the date of award. The closing date for submission of bids is 30 June 2023 with the estimated date for the announcement of successful bids on 31 July 2023. More information on the blocks is available in the OBR4 data package.

The US Bureau of Ocean Energy Management (BOEM) will hold Cook Inlet Lease Sale 258 on 30 December 2022. Approximately 958,202 acres comprising 193 blocks will be offered. Sealed bids will be accepted until 29 December. The BOEM was directed to hold this sale by the end of this year under a provision in the Inflation Reduction Act of 2022.

Argos Resources has received a two-year extension on Production Licence 001 (PL001), which makes the new expiration date 31 December 2024. Argos noted it plans to undertake 3D seismic reprocessing and has a commitment to drill one exploration well by the end of the second term. PL001 is adjacent to the Sea Lion oil discovery. Argos also announced an agreement to sell 100% of its interests in PL001 to JHI Associates, subject to certain conditions. JHI has proposed issuing Argos new shares in JHI along with a cash payment that would enable Argos to settle transaction and corporate expenses. If finalised, the transaction would result in Argos being a minority shareholder in JHI. JHI holds a 17.5% stake in the Canje block off Guyana.

Mobilisation/Rig Moves

Well-Safe Solutions has mobilised its Well-Safe Protector jackup rig from the Cromarty Firth to the North Sea for the first time in two years since it has been bought. Well-Safe Protector, formerly known as West Epsilon, was bought from Seadrill in 2020. This mobilisation is the culmination of years of planning and upgrading to meet the challenges of well plug and abandonment. The rig will now work for Ithaca Energy to plug and abandon six wells on the Anglia platform in the Southern North Sea. The work was initially supposed to start in late summer 2022. There is an option for the P&A of an additional three wells available in 2023. Following the completion of work for Ithaca, the rig is scheduled to work for Neptune Energy under a one-year contract which includes the P&A of at least 4 subsea and 21 platform wells in the Dutch and UK sectors of the North Sea. Neptune also has eight three-month options for work thereafter.

Diamond Offshore 6,000-ft semisub Ocean Onyx has been moved to a warm stacking location in Malaysia after spending several months warm stacked off Australia. Ocean Onyx worked for Beach Energy from February 2021 to July 2022. Diamond Offshore expect the rig to secure work in the second half of 2023.

Other News

Arena Energy has closed the acquisition of seven blocks and 12 platforms in the US Gulf from GOM Shelf, LLC. Arena noted the assets have optionality to restore and increase production and include four platforms in blocks that Arena was recently awarded from Lease Sale 257. Affiliate company Arena Offshore has three jackups under contract in the US Gulf – Enterprise 351, WFD 250 and WFD 400. All three rigs are managed by Enterprise Offshore.

Wintershall Dea and partners Petoro and Sval Energi have submitted the Plan for Development and Operation (PDO) of the Dvalin North field in the Norwegian Sea to the Norwegian Ministry of Petroleum and Energy. The Dvalin North partnership will commit some €780 million (about $829 million) to develop the discovery, drilling three producing wells from a single subsea template located 10km to the north of the existing Dvalin field. Dvalin is forecast to come into production in the coming months. Dvalin North is scheduled for planned start-up in late 2026. More here…

Norway’s energy giant Equinor has started production from its operated Johan Sverdrup Phase 2 project in the North Sea. The Johan Sverdrup Phase 2 project consists of a new platform, five new subsea systems, 28 new wells, a new module for the existing riser platform, and facilities to send power from shore to the Utsira High area. The field receives power from shore through cables from Haugsneset north of Stavanger. At the plateau, the Johan Sverdrup field will produce 720,000 barrels of oil daily, aiming to rise to 755,000 barrels per day. Johan Sverdrup alone can thus meet 6-7 % of the daily oil demand in Europe. Recoverable volumes in the Johan Sverdrup field total 2.7 billion barrels of oil equivalent. When the Johan Sverdrup field reaches plateau production, every third Norwegian oil barrel will come from this giant field, which will be essential in ensuring high and stable energy deliveries from Norway.

Aker BP and its partners have submitted a total of ten plans for development and operation (PDOs) and one plan for installation and operation (PIO) to the Ministry of Petroleum and Energy (MPE). With total investments of more than NOK 200 billion (about $20.2 billion) in real terms, these Aker BP-operated oil and gas projects represent one of the largest private industrial developments in Europe. Total recoverable resources in these development projects amount to 730 million net barrels of oil equivalent for Aker BP. These development projects will enable Aker BP’s oil and gas production to grow from around 400,000 barrels per day in 2022 to around 525,000 barrels in 2028. More here…