This week, Transocean secured a new drillship contract in Brazil, TPAO began drilling a new well in the Black Sea, Aquadrill's Vela started its charter with Beacon in the Gulf of Mexico, and Dolphin Drilling's Blackford Dolphin completed its five-year recertification.
The UK government has recently made a step forward with its 33rd licensing round process, which is meant to drive its efforts to increase domestic production at a time when the security of supply is at the top of every government’s agenda. However, with the current political environment in the UK eroding investor confidence, the increased burden of the windfall tax, and the limited availability of rigs for near-term programmes, it remains to be seen how all this will play out over the next couple of years and whether the current government’s plans will be thwarted. More here…
Contracts & tenders
Transocean has been awarded a 910-day charter with an estimated backlog of $392 million, excluding a mobilisation fee of 90 times the contract dayrate, for the 12,000-ft drillship Dhirubhai Deepwater KG2 for work off Brazil. Operations are expected to begin in Q3 2023. The rig is currently stacked off Malaysia. It last worked for Shell off Brunei until early 2022. This new award is believed to be from Petrobras for the BM-S-11 project. Petrobras was understood to be seeking up to two rigs for BM-S-11, and market sources indicate a second award is likely imminent.
Stena Drilling has signed a new contract with Ithaca Energy in the UK for the 5,000-ft Stena Spey semisub rig. The operations for Stena Spey in the UKCS are due to begin between 1 June and 1 September 2023, with an estimated scope of 45-75 days with the option to extend for a further 60 days. The semisub is currently warm stacked in the UK and is due for an SPS soon. Its most recent contracts were with Parkmead and TotalEnergies.
Drilling Activity and Discoveries
Murphy did not find commercial hydrocarbons at the Tulum-1EXP exploration well on Block 5 offshore Mexico. The well, drilled with the 8,500-ft semisubmersible Valaris DPS-5, was plugged and abandoned. Murphy stated that it is evaluating the results of the well with its partners Petronas and Wintershall Dea and monitoring the results of other wells in the area. The net well cost of Tulum-1EXP was $22 million. The company had an additional exploration period for the block approved in 2022. Valaris DPS-5 remains in Mexico, where it is now drilling for Eni.
TPAO has begun drilling the Amasra-2 well in the Sakarya natural gas field in the Black Sea offshore Turkiye. The well is being drilled with the 10,000-ft drillship Fatih. Amasra-2 follows the Amasra-1 exploration well, which was drilled with Fatih in 2021 and resulted in a 135 billion cubic meter discovery. Fatih is one of four TPAO-owned drillships active offshore Turkiye. The Turkish state company’s most recently-acquired rig, the 12,000-ft Abdulhamid Han, began operations in August 2022.
Neptune Energy has started production from the 10th well at its operated Cygnus gas field in the UK Southern North Sea and is now drilling the next one. The drilling operation was carried out by Borr Drilling’s Prospector 1 jackup rig, the first in Borr’s fleet to be equipped with technologies that reduce carbon and nitrogen emissions from operations by up to 95%, and particle matter emissions by more than 85%. Neptune has now started drilling on the 11th well on the Cygnus field, which is expected to begin production in Q2 this year. The 400-ft jackup rig has been with Neptune since March 2022. Once the Cygnus operations are complete, the rig will move to the Netherlands where it will continue its work for Neptune until August 2023. Neptune Energy is the operator of the field with a 38.75% interest and Spirit Energy is its partner with a 61.25% interest.
Aquadrill’s 12,000-ft drillshipVela has commenced its charter with Beacon Offshore in the US Gulf. The ultra-deepwater rig is being managed by Diamond Offshore. Vela is on location at the Zephyrus prospect in Mississippi Canyon Block 759 in 3,530 feet of water. After this well, the rig will pause the charter with Beacon while it undertakes a 150-day campaign with an undisclosed operator – believed to be bp. Vela will then resume its charter with Beacon, which is for a minimum of 225 days with options to add 5-7 more wells. Aquadrill is in the process of being acquired by Seadrill. The transaction is expected to close in mid-2023.
Trillion Energy stated that preliminary indications from its Guluc 2 well at the SASB field in the Black Sea offshore Turkiye suggest 73 metres (240 ft) of potential natural gas pay. The well is the third in Trillion’s multi-well programme at SASB. Guluc 2 is to be completed and brought into production in February. GSP’s 333-ft jackup GSP Uranus will then move to complete the West Akcakcoa-1 well.
OMV has started drilling its Eirik exploration well located in production license (PL) 817 in the North Sea offshore Norway, using the 3,900-ft Deepsea Yantai semisub rig. OMV secured a drilling permit from the Norwegian authorities in January 2023. The Eirik exploration well (15/2-2 S) is close to the Gudrun field approximately 200 kilometres west of Stavanger. The water depth in the area is 111 meters. The duration of the Eirik drilling campaign is up to 100 days with a successful discovery including a sidetrack. The Deepsea Yantai arrived from Ågotnes to the well location yesterday. This year, the 3,900-ft rig also has work lined up with Wellesley Petroleum, DNO, and Neptune Energy. OMV (Norge) AS is the operator of the licence with a 50% working interest and its partners are Neptune Energy and Source Energy with 30% and 20% working interest, respectively.
QatarEnergy has entered into agreements with the Government of Lebanon, TotalEnergies and Eni, becoming a partner with a 30% working interest in Blocks 4 and 9 offshore Lebanon. TotalEnergies is the operator of the blocks with a 35% interest, while Eni holds the remaining 35% interest. TotalEnergies plans to drill an exploration well on Block 9 later this year and recently accepted bids from drilling contractors for an offshore rig to carry out this work. Block 9 lies off the coast of southern Lebanon and has a total area of 1,749 square kilometres in water depths of around 1,700 meters (5,577 ft), while Block 4 has a total area of 1,911 square kilometres in water depths of about 1,500 meters (4,921 ft).
The Maltese government has granted Albion Energy subsidiary Albion Energy Limited an exploration licence for Area 2 and Area 7 offshore Malta. These areas cover 18,000 square kilometres. The licence agreement is for two years, with the possibility of a further two-year extension subject to an additional work program. Albion’s obligations during the first two years consist of geological and geophysical studies on existing data. Licences for Area 2 and 7 were previously granted to Heritage Oil in 2007. Albion CEO and founder Tony Buckingham also founded Heritage Oil, which was acquired by Energy Investment Global in 2014.
Dolphin Drilling has announced that the 7,000-ft semisub Blackford Dolphin has completed a five-year recertification and is soon ready to begin its 12-month drilling contract with General Hydrocarbons Limited (GHL) in Nigeria. The Blackford Dolphin arrived in Las Palmas, Canary Islands and was moored quayside on 24 November 2022. The rig has completed its recertification for a new five-year period and it will now be towed to Nigeria to start its previously announced 12-month drilling contract with GHL in early March 2023. The rig has also recently signed a letter of award with an undisclosed operator offshore Nigeria, which will be in direct continuation of the contract with GHL.
Odfjell Drilling has installed hybrid flywheel technology on the 6,560-ft semisub Deepsea Nordkapp in order to reduce emissions. The PowerBlade Hybrid system uses a combination of flywheels and batteries connected to the rig’s drawworks to capture and store kinetic energy, which can be used to supplement the rig’s power system. Deepsea Nordkapp is currently working for Aker BP offshore Norway. The rig is covered by Odfjell’s alliance agreement with Aker BP and Halliburton, which was renewed for five years in January 2023. Similar flywheel technology has also been installed on the 10,000-ft semisub Deepsea Stavanger, which is also covered by the alliance agreement and is to start work with Aker BP in 2025.
Northern Drilling has raised $10 million through a private placement of new shares in the company to cover the arbitration costs for two cancelled drillship orders. Northern Drilling allocated 3,214,806 new shares at a subscription price per new share of NOK 31, raising about $10 million in gross proceeds. The net proceeds from the private placement will be used to cover litigations costs for the ongoing arbitration proceedings relating to claims arising from the termination of resale contracts with South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) for the 12,000-ft drillships West Aquila and West Libra. The contracts for the West Aquila and the West Libra were cancelled in August 2021 and October 2021, respectively, citing delay of delivery as well as repudiatory breach of contract. The company has no other drilling units in operation or under construction. More here…