This week Shelf Drilling secured new contracts in India and Nigeria and Seadrill entered into a merger agreement with Aquadrill. Meanwhile, Eni made a new gas discovery in Cyprus, PTTEP in Malaysia, and Vår Energi in the Barents Sea offshore Norway.
In case you missed it, you can access our previous Rig Market Round-Up here.
Contracts & tenders
ADNOC Drilling has announced that it has acquired two GustoMSC CJ46 jackups for a combined price of USD 200 million. The two jackups are understood to be SMS Miriam and SMS Faith, which are owned by Well Target Five Ltd. and Well Target Six Ltd., respectively, and were managed by Selective Marine Services. Esgian reported the sale earlier this year. ADNOC Drilling has been expanding significantly in the past year and has acquired 11 jackups in the last 12 months. The current fleet stands at 32 jackups, with further expansion expected in the future.
On 19 December 2022, Saipem finalised its purchase of drillship Santorini from Samsung Heavy Industries. Saipem had a purchase option for the rig, which had been under bareboat charter. Santorini continues to work in the US Gulf, where it is contracted until Q3 2023. It is understood the rig is being marketed for follow-up work in the US Gulf as well as in other locations, such as West Africa.
Perforadora Central has secured two-year extensions with Pemex for work off Mexico for two of its jackups. Papaloapan and Tonala will both now remain with the operator until December 2024. Meanwhile, two of Perforadora Central’s jackups that had been cold-stacked for about a year are once again being marketed for work – Panuco and Tuxpan. Over the course of this year, several jackups have been sold from the Mexican fleet, one for recycling with the rest going to the Middle East for work, where demand has been very strong. This has increased opportunities for stacked rigs in Mexico to make a comeback.
Shelf Drilling has received three-year contract awards for two of its jackup rigs with Oil and Natural Gas Corporation (ONGC) for operations in Mumbai High, offshore India. The three-year contracts have been awarded to the 300-ft Compact Driller and 350-ft Key Singapore rigs. The planned start-up of operations for both contracts is Q2 2023. Compact Driller is currently working for Masirah Oil in Oman and Key Singapore is currently under a contract with Cairn in India.
Seadrill has entered into a definitive merger agreement to acquire Aquadrill, formerly Seadrill Partners, in an all-stock transaction. The transaction values Aquadrill at an implied equity value of approximately USD 958 million. Seadrill Partners became Aquadrill Offshore after emerging from Chapter 11 restructuring in May 2021. Simon Johnson, Seadrill’s President and Chief Executive Officer, said that the shared heritage of the two companies will promote their efficient integration. Upon completion of the transaction, Seadrill shareholders and Aquadrill unitholders will own 62% and 38%, respectively, of the outstanding common shares in the company. Seadrill says it will be well-placed to realize estimated annual run rate synergies of at least USD 70 million and well-positioned for further growth. The company will have a combined backlog of USD 2.8 billion and own 12 floaters (including seven 7th-generation drillships), three harsh environment rigs, four benign jack-ups, and three tender-assisted rigs. Additionally, seven rigs will be managed under a variety of strategic partnerships. More here…
Shelf Drilling has secured a one-year contract for the 300-ft Trident VIII jackup rig for operations offshore Nigeria. The rig will complete a short out-of-service project prior to the expected contract commencement in Q2 2023. The jackup is currently under a contract with Hans & Co., on behalf of GNPC, in Ghana. The firm contract is scheduled to end in February 2023 and the customer has a 90-day option.
Drilling Activity and Discoveries
Gazprom Nedra, a 100% exploration subsidiary of Russia’s Gazprom, has completed this year’s drilling campaign in the Kara Sea and the Barents Sea, using the 1,640-ft semi-submersible drilling rig Severnoye Siyaniye. The rig was mobilised from Kola Bay in July 2022 to work on two wells. Results from testing an exploration well in the Kara Sea were announced in September. Tests from deposits in the Tanopcha Formation resulted in a commercial flow of a gas-condensate mixture. Hydrodynamic studies confirmed the high potential of the deposit, which will provide an increase in proven gas and condensate reserves and place them on the national register. On completion of the exploration well, the Severnoye Siyaniye was towed to the Barents Sea for another exploration well in the Arctic. More here…
Trillion Energy intends to continue drilling at the SASB natural gas field offshore Turkiye with GSP 333-ft jackup GSP Uranus throughout 2023. The company began its drilling program at SASB in September 2022, completing the AK-South well in October 2022 and bringing the AK-3 well into production in November. Trillion spud the Guluc-2 and AK-West wells in December 2022. Trillion Energy now plans to bring a combined eight wells and workovers into production in 2023, with the completion and testing of AK-West and Guluc-2 in the first quarter of the year and another six wells drilled from the second to the forth quarter of the year.
Eni has made a new gas discovery at the Zeus-1 well, in Block 6 offshore Cyprus. This is Eni’s third consecutive discovery in this block. Eni is the operator of Block 6 with a 50% interest and its partner TotalEnergies holds the other 50% interest. This discovery follows the Calypso-1 and the Cronos-1 discoveries made on the same block in 2018 and August 2022, respectively. Eni says that the Zeus-1 well encountered 105 meters of net gas pay in a carbonate reservoir sequence. The gas in place associated to this reservoir is preliminarily estimated between 2 and 3 TCF. Located 162 km off the Cyprus coast and 5 km west of Cronos-1, Zeus-1 has been drilled and successfully tested by the Vantage Drilling-owned Tungsten Explorer drillship. The rig arrived in Cyprus in May 2022. Results of the test are being incorporated in the evaluation of the discoveries cluster that will drive subsequent studies and operations targeting a fast-track development of Block 6.
Thailand’s PTTEP has made another gas discovery in Malaysia from the exploration well, Paprika-1, in Block SK410B. The discovery provides PTTEP with a further development opportunity in Northern Sarawak. PTTEP’s subsidiary, PTTEP HK Offshore Limited (PTTEP HKO), started the drilling of Paprika -1 wildcat well in Block SK410B in July 2022, using Velesto’s 400-ft Naga 5 jackup rig. The well was drilled to a total depth of 3,348 meters and encountered gas pay in clastic reservoirs. PTTEP and partners, Kufpec and Petronas Carigali, previously made a major gas discovery at the Lang Lebah structure within the same block. PTTEP HKO is the operator of the SK410B with a 42.5% participating interest while Kufpec holds 42.5% and Petronas Carigali 15% interest. More here…
Vår Energi has confirmed the discovery of gas in its operated 7122/9-1 (Lupa) well, which is located in the Goliat area of the Barents Sea, offshore Norway. Preliminary estimates of the size of the discovery are between 57-132 million barrels of recoverable oil equivalent. Alessandro Barberis, VP of Exploration, says this is the largest discovery on the shelf this year. The primary exploration target for the 7122/9-1 T2 Lupa well was to prove hydrocarbons in the Havert formation of Triassic age. The well encountered a gas column of 55 meters in sandstones with moderate to good reservoir quality. The gas-water contact was not encountered in the well. The total depth was called in the Ørret formation. Extensive data acquisition took place, including sampling, and the discovery will now be further assessed and matured. The Lupa well was drilled in PL229E by the 1,640-ft Transocean Enabler and will be permanently plugged and abandoned. The water depth at the site is 403 metres.
Demand
Brazil’s National Agency for Petroleum, Natural Gas, and Biofuels (ANP) received offers on four of the 11 blocks available in the 1st Cycle of the Permanent Production Sharing Offer, which was held on 16 December. The auction resulted in nearly BRL 916.3 million (USD 178.7 million) in signature bonuses and BRL 1.44 billion (USD 280.9 million) in planned phase one investments by the winning companies. Two of the blocks were in the Campos Basin. Agua Marinha will be operated by Petrobras with 30% interest. Partners are TotalEnergies (30%), Petronas (20%), and QatarEnergy (20%). For Norte de Brava, Petrobras will be the operator with 100% interest. The other two blocks were in the Santos Basin. Bumerangue was picked up by bp with 100% interest, and Sudoeste de Sagitario will be operated by Petrobras with 60% interest and partner Shell with 40% interest. Contracts are expected to be signed by 28 April 2023.
Eco Atlantic has increased its interest in Block 34/4B offshore South Africa to 26.25% via the acquisition of a 6.25% participating interest from a shareholder of Ricocure. This follows regulatory approval from the Department of Mineral Resources and Energy of South Africa and the Petroleum Agency of South Africa. Africa Oil Corp. is the operator of Block 34/4B with a 20% interest while Ricocure holds the remaining 53.75% interest. The partners are contemplating a drilling campaing on the block in 2023 and have been working to farm out up to 55% interest.
PNOC Exploration Corporation (EC), the state-owned oil company of the Philippines, is searching for joint venture partners for the exploration programme for Service Contract (SC) 59, which is located off Palawan, west of Balabac Island, Philippines. Interested parties are invited to submit a letter of intent by 27 December 2022. Meanwhile, the deadline for proposal submissions is 10 February 2023. SC59 was awarded in September 2005. It covers 14,760 sq km. BHP farmed into the licence in 2009 and became operator until withdrawing in 2013. PNOC EC currently holds 100% interest.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has launched Mini Bid Round 2022, offering seven offshore blocks covering around 6,700 square kilometers in water depths of 1,150 to 3,100 meters (3,773 to 10,171 ft) for new exploration and drilling activity. A pre-bid conference is scheduled for 16 January 2023, with companies invited to submit pre-qualification applications by 31 January 2023. The Mini Bid Round is the first in a series of bid rounds to be held in accordance with Nigeria’s Petroleum Industry Act 2021. The company’s last bid round held in April 2007 was under a different regulatory regime.
Mobilisation/Rig Moves
Transocean newbuild drillship Deepwater Titan had its naming ceremony in Singapore on 10 December.
Deepwater Titan will be the first offshore rig delivered with two 20K psi BOP stacks. It will also have a 3.0 million pound hookload and five 10K psi mud pumps. Following delivery, the rig will transit to the US Gulf where it has a five-year charter with Chevron for work at the 20K Anchor project.
Noble Corp. reported that 400-feet jackup Noble Regina Allen experienced a mechanical issue while preparing to move from a location, offshore Trinidad. An issue in the jacking gear caused damage to the bow leg braces and joints, which prevented the rig from being able to fully retract one of its legs. The personnel on the jackup had to be evacuated due to the structural integrity of the leg being compromised. Prior to the technical failure, the rig had completed all well operations and the well is secure.
Odfjell Drilling has taken over the management of Hercules, the 6th-generation semisubmersible rig owned by SFL Corporation. The rig was previously bareboat chartered and managed by Seadrill. The 10,000-ft Hercules, previously known as West Hercules, is currently moored at Semco Maritime’s yard in Hanøytangen, Norway to prepare for operations with ExxonMobil in Canada in Q2 2023. SFL secured the contract with ExxonMobil, worth about USD 50 million, back in November 2022. The one-well contract has a duration of 135 days, with an option for a 60-day extension.
Other News
Oil and gas operator DNO has decided not to submit its plan for development and operation (PDO) for its operated Brasse project in the North Sea offshore Norway by the end of this year. The Brasse project is located in PL740 where DNO and Vår Energi each have a 50% interest. DNO said the decision to delay the filing of the plan, which was expected by the end of this year, is due to recent changes in the temporary petroleum tax system and industry cost pressures, which have significantly weakened the project’s economics. Separately, DNO has acquired an additional 10% stake in the Berling (previously Iris Hades) field development project from Sval Energi. More here…
Equinor has submitted its plan for development and operation (PDO) for the Andvare field development (previously Gjøk) to the Ministry of Petroleum and Energy. The field lies within a license PL159B in the Norwegian Sea that also includes the producing Alve field as a subsea tieback to Norne FPSO. It is operated by Equinor (53%) with DNO Norge (32%) and PGNiG Upstream Norway (15%) as partners. The Andvare development will use existing infrastructure and an available Norne well slot, allowing for a fast-track development of the gas discovery.
OMV has filed the Plan for Development and Operation (PDO) for the Berling gas and condensate discovery located in the Norwegian Sea to the Norwegian Ministry of Petroleum and Energy. The development cost is estimated at NOK 9.1 billion (about USD 923 million). The Berling discoveries (Iris and Hades) in PL 644 were made in 2018 on the Haltenbanken in the Norwegian Sea. The estimated recoverable resources are expected to be some 45 million barrels of oil equivalents. The recommended development concept for the Berling field is a 4-slot subsea production template tied back via a 24-kilometre pipeline to the Equinor-operated Åsgard B platform. More here…
North Sea operator Serica Energy is poised to become one of the top 10 UKCS producers following an entry into an agreement to acquire the entire issued share capital of Tailwind Energy Investments Ltd from Tailwind Energy Holdings. The consideration for the acquisition comprises the issue of up to1 111,048,124 new ordinary shares in Serica. Following the issue of the consideration shares, they will represent up to 28.9 per cent of Serica’s enlarged issued share capital. The deal also includes a cash payment on completion of £58.7 million. On the basis of the Serica closing price as of 19 December 2022 of 278 pence per share this would be equivalent to £367 million (about USD 445.7 million). Serica will also be taking on Tailwind’s net debt of c.£277 million. More here…
Keppel Offshore & Marine (O&M) has reached a joint resolution with Brazil’s Attorney General and Comptroller General related to corrupt payments made by a former agent of Keppel in Brazil. In December 2017, a joint resolution with criminal authorities in Brazil, the United States, and Singapore was announced. The new leniency agreement that was just announced is a separate negotiation process between Keppel and Brazilian authorities that followed the 2017 agreement. Under the terms of the latest leniency agreement, Keppel O&M has agreed to a total payment of BRL 343,571,455.25 (USD 65 million) in fines and damages, to be paid within 30 days of signing the agreement. Keppel has also committed to continuing to cooperate with the agencies and to ongoing compliance enhancements. More here…
PTT Exploration and Production (PTTEP) has entered into an agreement to sell its 2.5% interest in the Block 17/06 offshore Angola to Somoil. Completion of the sale is expected by mid-2023 and marks the withdrawal of PTTEP’s investment in Angola. Block 17/06 is off the west coast of Angola. TotalEnergies is the operator of Block 17/06, where it is currently developing the Begonia oil field. The Begonia development consists of five wells tied back to the Pazflor FPSO already in operation on Block 17. TotalEnergies operates Block 17/06 with a 30% interest, alongside affiliates of Sonangol P&P with 30%, SSI with 27.5% and Falcon Oil with 5%. ACREP/Somoil will hold a 7.5% interest following its acquisiton of PTTEP’s stake.
Ocyan has entered into agreements that will result in the restructuring the drilling assets of its business. The new drilling business will be domiciled in a Luxembourg holding company. Once finalised, all five of the offshore rigs, plus people and infrastructure, will be transferred into the new entity, currently known as DrillCo. In addition the contract to oversee the reactivation of PetroRio’s semisub Capricorn will also be transferred to the new entity. More here…
