This week, Noble revealed new contract awards for its drillships in Nigeria and the Gulf of Mexico and Brazil's Ocyan was awarded a charter to manage the Capricorn semisub. Meanwhile, the Noble Discoverer started drilling the Wei-1 well in Guyana and Heydar Aliyev began drilling a new exploration well in the Caspian Sea for BP.
In case you missed it, you can access our previous Rig Market Round-Up here.
Esgian Rig Analytics Story
Following the final investment decision (FID) announced by TotalEnergies on 16 January for the Lapa South-West project off Brazil, which is expected to come online in 2025, we decided to take a closer look at some of the projects that are expected to reach FID this year. Over 50 projects with target FID dates in 2023 are being tracked in Esgian’s Rig Analytics database. More here…
Contracts & tenders
Noble Corp.’s 12,000-ft drillship Noble Gerry de Souza is expected to commence a new contract with an undisclosed operator offshore Nigeria in the near term. This contract has a firm duration of nine months and unpriced options extending into the third quarter of 2024. The rig left Suriname for West Africa after finishing a contract with TotalEnergies in December 2022. While Noble Corp. has not disclosed an operator for the new contract, market sources had expected the rig to work for TotalEnergies offshore Nigeria.
Three Noble Corp. drillships have been awarded new contracts in the US GoM. All of these contracts are expected to begin in 2023. The 12,000-ft Noble Stanley Lafosse has received a commitment from an undisclosed operator for a six-well program, starting around June 2023 and keeping the rig working into mid-2024. This firm period has an estimated backlog of around $148 million. The contract also includes five one-well options at mutually agreed day rates. The 12,000-ft Noble Faye Kozack has been awarded a one-well contract with Kosmos Energy to begin in the second or third quarter of 2023. This contract has a minimum duration of 50 days at a day rare of $450,000. Noble Faye Kozack is currently working for QuarterNorth Energy in the US GoM. QuarterNorth recently exercised a one-well option for the rig and have further one-well option available. The 10,000-ft Noble Globetrotter I has been awarded a new contract with an undisclosed operator for 70 days of plug and abandonment work, starting in July 2023. Noble Globetrotter I is currently offshore Mexico, where it is expected to commence a contract with Petronas in late January 2023. This start date was pushed from late 2022 to January 2023 due to permitting delays.
Ocyan has been awarded a 730-day charter to manage operations for the 10,000-ft semisub Capricorn, which is owned by PetroRio. Operations off Brazil are expected to begin in August 2023. Ocyan already has an agreement in place to manage the reactivation of this rig, which is underway in Trinidad and Tobago.
Drilling Activity and Discoveries
CGX Energy has spudded the Wei-1 well in the Corentyne block off Guyana using the 10,000-ft semisub Noble Discoverer (ex-Maersk Discoverer) in 1,912 ft of water. Furthermore, the government has approved an Appraisal Plan for the northern section of the block. Following drilling operations at Wei-1 and results analysis, CGX and partner Frontera Energy may consider more wells under the appraisal programme to evaluate development feasibility in the Kawa-1 discovery area and the rest of the northern section of the block. Future drilling plans are contingent upon positive results at Wei-1. Wei-1 has a target total depth of 20,50 ft and is targeting Maastrichtrian, Campanian, and Santonian aged stacked sands within channel and fan complexes. Operations are expected to take about 4-5 months before reaching total depth. Noble Discoverer is currently uncommitted following this assignment.
Aberdeen-based Well-Safe Solutions has deployed the 1,500-ft Well-Safe Guardian, its semisubmersible decommissioning unit designed for decommissioning of subsea wells, to Repsol Sinopec’s Claymore field in the UK North Sea. Well-Safe Solutions, on behalf of Repsol Sinopec Resources UK, placed moorings on the seabed at the Claymore field on 22 January in advance of the mooring of the Well-Safe Guardian rig. The P&A activity within the Claymore field in Block 14/19 on the 14/19-B2 well started on Tuesday and is expected to continue by 13 March 2023. The operation is part of the Well-Safe Guardian’s contract scope for Repsol Sinopec, which was awarded in 2021 and started in 2022. The campaign was split into two parts to allow the rig to pass to CNR for P&A in 2022 after which it returned to Repsol Sinopec.
BP, on behalf of the Shah Deniz co-venturers, has announced the spud of a new exploration well in the contract area under the agreement on the exploration, development and production sharing for the Shah Deniz prospective area in the Azerbaijan sector of the Caspian Sea. Shah Deniz is one of the world’s largest gas-condensate fields. It is located on the deep water shelf of the Caspian Sea, 70 km southeast of Baku, in water depths ranging from 50 to 500 m. The SDX-8 well is drilled with the 3,280-ft Heydar Aliyev semisubmersible drilling rig, which was moved to the location in the eastern flank of the Shah Deniz field in December 2022. It is planned to drill the well to a total depth of around 7,000 metres. The well will take approximately one year to drill and a further testing programme could extend the well’s duration in order to evaluate the results. If successful, the well will provide a clearer understanding of drillability, producibility, and resource potential of the deeper horizons beneath the currently producing reservoirs in the eastern flank.
Hess confirmed a significant new oil discovery at the ExxonMobil-operated Fangtooth SE-1 well, which is about 8 miles southeast of the original Fangtooth-1 discovery well. Fangtooth SE-1 encountered approximately 200 ft of oil-bearing sandstone reservoirs. This adds to the gross discovered recoverable resource estimate of over 11 billion boe in the Stabroek Block. The 10,000-ft drillship Stena Carron drilled the well in 5,397 ft of water. Further appraisal activities are underway.
Tullow Oil drilled two wells at the Jubilee South East area offshore Ghana in the second half of 2022 and is now drilling a third well with Noble 12,000-ft drillship Noble Venturer. These wells are to begin production in the second half of 2023 after the installation and tie-in to the Jubilee South East Project infrastructure. Tullow brought four new wells at the Jubilee field online in 2022. Following the completion of the Jubilee South East Project installation in mid-2023, the company expects the majority of future capital expenditures in the region to be focused on drilling and completing new wells. Noble Venturer began a four-year contract with Tullow offshore Ghana in April 2021. In addition to work in the Jubilee area, Tullow has also used Noble Venturer to drill at the TEN fields. While Tullow does not plan to add any new wells at TEN in 2023, the company’s long-term plans do include infill drilling, particularly at the Ntomme field.
Transocean’s 1,969-ft Paul B. Loyd, Jr. semisubmersible rig is preparing for drilling operations in the UK North Sea for NEO Energy. The NEO Energy-operated Finlaggan gas condensate field is a two-well tie back to Britannia platform. The first production started in Q4 2021. Petrofac, acting as Well Management and Well Operator Services provider for NEO Energy, will use the Paul B. Loyd, Jr. rig to drill the Finlaggan F3H well. Operations are expected to start on 4 February 2023 and to be concluded by the end of May 2023. The well is located approximately 168 km from the Scottish coastline and 54km southwest of the UK/ Norwegian median line. The water depth at the drilling location is 140 metres. The F3 well is a new single well targeting condensate and gas. It will be tied back to the existing Finlaggan manifold and produced at the Britannia platform. The rig was sublet under the Harbour Energy charter. After this well, it will return to work for Harbour until mid-2024.
Demand
Speaking at the World Economic Forum on 19 January 2023, Colombia’s Minister of Mines and Energy, Irene Velez Torres, stated during the panel session The Different Roads to Energy Transition that Colombia will no longer grant new prospecting licences for gas and oil. Velez noted that while it has been a controversial topic on a national level, it shows Colombia’s clear commitment to fighting climate change. Colombia is developing its energy transition roadmap, which will contain its decarbonisation targets. This was one of the campaign topics of President Gustavo Petro Urrego, who took office in August 2022. President Petro has taken the stance that existing oil and gas contracts would be honoured.
The Petroleum Directorate of Sierra Leone (PDSL) has extended the deadline for submission of a formal bid for Sierra Leone’s 5th Offshore License Round from 27 January 2023 to 29 September 2023 to allow companies time to continue technical evaluation of the acreage. The round was originally launched in May 2022 and includes a total acreage of 63,643 square kilometres (56 offshore blocks). In September 2022, the PDSL extended the deadline from 30 September 2022 to 27 January 2023, citing increased interest in the upstream petroleum sector in West Africa.
Norway’s Ministry of Petroleum and Energy has sent a proposal for the announcement of the concession round APA 2023 (allocation in predefined areas) for public consultation, adding a total of 92 blocks in the Barents Sea and the Norwegian Sea. Oil and Energy Minister, Terje Aasland, said: “The proposal for a tender that has been sent out for consultation includes adding 92 blocks in the north to the APA area. Facilitating new discoveries in the north is important both for Europe, the country and the region.” The majority of these new blocks are in the Barents Sea, 78, and the remaining 14 are in the Norwegian Sea. The APA 2023 will be carried out in line with the usual schedule, which means an announcement with an application deadline is expected in the third quarter of 2023 and awards in January 2024. This comes after the government decided to postpone the 26th oil and gas licensing round. As a result, the round will not proceed during the life of the current parliament, which ends in 2025.
Woodside continues to progress the Trion project off Mexico towards a final investment decision (FID) this year. During Q4 2022, Woodside issued competitive tenders for the drilling rig, subsea equipment, and installation scopes for subsea, the floating production unit, and the floating storage and offloading vessel. The operator has received confirmation from Mexico’s National Hydrocarbons Commission that its minimum work programme obligation for the licence has been completed. Market sources advise that the rig tender is for a floating rig for three years starting in 2026. Woodside took over as operator of Trion following its acquisition of BHP last year.
UK’s North Sea Transition Authority (NSTA) has identified a wave of new opportunities for the offshore energy supply chain, which will be created by upcoming oil and gas projects. Research has identified seven near-term projects which will require 30 new wells and 194 kilometres of pipeline. The core study also showed that vessel and rig owners will be especially in demand as their services will be needed for more than 5,000 vessel days and nearly 2,500 rig days. Except for one project, offshore work on most of those developments is expected to get underway in 2024 – subject to net zero regulatory assessments being passed. Environmental statements for five additional near-term projects were also analysed as part of the wider study. They would require a further 17 wells, 128 kilometres of pipeline, around 3,400 vessel days and 1,400 rig days. The NSTA emphasised that it is vital that operators collaborate with suppliers and share their plans early, helping ensure that resources are available at the right time. Some of the 12 projects included in the wider study are Avalon, Cambo, Captain EOR Phase II, Jackdaw, Murlach, Rosebank, Talbot, and Teal West.
Hess has announced its Exploration and Production (E&P) capital and exploratory budget for 2023 is $3.7 billion. Over 80% of the budget is earmarked for Guyana and Bakken. The Bakken is an onshore US play, while Guyana is offshore activity. The breakdown of the $3.7 billion is $1.45 billion (39%) for production, $1.7 billion (46%) for offshore Guyana developments, and $550 million (15%) for exploration and appraisal activities. Select line items include $90 million for Liza Phase 1 and Phase 2 in the ExxonMobil-operated Stabroek Block off Guyana; $1.21 billion for the Payara, Yellowtail, and Uaru developments in the Stabroek Block; and $55 million to drill approximately 10 exploration and appraisal wells in the Stabroek Block, two wells in the Gulf of Mexico, and one well off Newfoundland, Canada, along with seismic acquisition and processing in Guyana, Suriname, and the deepwater Gulf of Mexico.
Mobilisation/Rig Moves
Noble Corp.’s 400-ft jackup Noble Regina Allen has had its contract with EOG Resources offshore Trinidad & Tobago terminated early after it experienced a mechanical failure with the jacking system of one of its legs in mid-December 2022. The rig has been off day rate since the incident in mid-December, with the contract terminated early due to the extended downtime. According to Noble’s most recent fleet status report, Noble Regina Allen was previously expected to remain under contract into September 2023. The rig has standard insurance coverage pertaining to repairs but there is no insurance for loss-of-hire. The 400-ft jackup has been demobilized to a port in Trinidad with repair plans under development. Noble stated that it is focused on repairing and positioning the rig for potential redeployment in the second half of 2023, although timing is uncertain.
Other News
Serica Energy has received a renewed license and secondary sanctions assurance from the US Office of Foreign Assets Control (OFAC) relating to the UK North Sea Rhum field, in which the company has a 50% interest. The license and assurance will allow certain U.S. and U.S.-owned or controlled entities and also non-U.S. entities to continue providing goods, services and support to Rhum beyond 31 January 2023, when the current license was due to expire. This will enable operations and production from the Rhum field delivering gas supplies to UK consumers to continue unaffected. The new license is for a period of two years with an expiry date of 31 January 2025. The license may be renewed on application by Serica assuming the conditions continue to be met. Serica CEO, Mitch Flegg, said that the renewal of this license satisfies one of the completion conditions required for the acquisition of Tailwind Energy, which was announced in December 2022.
The Prime Minister of Trinidad and Tobago announced that it has received a waiver from sanctions from the US Office of Foreign Assets Control that will allow the country to pursue development of the Dragon gas field in Venezuela. The Dragon field is located about 17 km (11 miles) across the border from Trinidad’s Hibiscus platform. Specific terms under the waiver are still being finalised.
Arena Energy has acquired Cox Operating’s interest in two shallow-water Gulf of Mexico fields. This acquisition consolidates Arena’s ownership interest in Eugene Island Block 330 and South Marsh Island Block 128, both of which Arena recently acquired from GOM Shelf.
The US Bureau of Ocean Energy Management (BOEM) has released proposed revisions to the bid adequacy meant to ensure fair market value is received from oil and gas lease sales. The revisions proposed include eliminating the delayed valuation methodology and adopting a statistical Lower Bound Confidence Interval at a 90% confidence level, and discontinuing tract classification, along with other minor changes intended to clarify and streamline the process. Once finalised, the revised procedures will be used for lease sales under the next National Outer Continental Shelf Oil and Gas Leasing Program. Comments on the proposed revisions will be accepted until 6 March 2023.
Image credit: Well-Safe Solutions
