In addition to new contract awards announced this week for Stena, Valaris, and Shelf Drilling, it was reported that Shell's Pensacola well in the Southern North Sea could represent one of the largest natural gas discoveries in that region in over a decade while Equinor's latest oil and gas discovery in the North Sea was the seventh in the area since 2019.
In case you missed it, you can access our previous Rig Market Round-Up here.
ContractsÂ
Stena Drilling has signed a contract extension with BP for the 10,000-ft Stena IceMAX drillship in the U.S. Gulf of Mexico. This extension will see the rig mobilise to the Gulf of Mexico in direct continuation of the initial one-well programme (estimated 90 days) offshore Newfoundland, for a further scope of two years. The drillship is currently under a contract with CNOOC in Gabon, which is scheduled to end in April. After that, the rig will move on to work for BP in Canada, starting in May.
Market sources indicate that the 12,000-ft drillship Valaris DS-8 has won the final slot in the Petrobras pool tender for up to eight floating rigs. The tender consisted of three lots, with up to two rigs for Lot 1, up to five rigs for Lot 2, and one rig for Lot 3. Late last year, seven of the eight slots were awarded, with only four going to Lot 2. The term for Lot 2 is 1,095 days plus an option for the same number of days. The start window is between January and November 2023. Valaris DS-8 is currently stacked in the Canary Islands. It last worked off Angola until March 2020.
Shelf Drilling has secured a one-year contract extension for a jackup rig offshore Egypt. The extension for the 250-ft Rig 141 is in direct continuation of its current term with Gemsa Petroleum Company (Gempetco) for operations in the Gulf of Suez. Following this extension, the expected availability of the rig is February 2024.
OMV and Wintershall Dea have each awarded a four-year frame agreement to Baker Hughes for integrated well construction and completion services in Norway. The contract started on 1 February 2023 and covers a combined scope of about 20 expected wells with Baker Hughes services for the Transocean Norge rig campaign. This comes after Wintershall Dea and OMV jointly awarded a contract in September 2022 to the Transocean Norge semisub for the exclusive use of the unit. As a result, Transocean Norge will drill a series of wells for both operators in the coming years. Between 2023 and 2026, Wintershall Dea plans to drill seven production wells on the Maria and Dvalin North field developments, a new injection well on the Nova field, at least three exploration wells and potentially some appraisal wells for the Luna carbon storage field. Between 2023 and 2027, OMV plans to drill three production wells on the Berling field developments, the Velocette exploration well in Q3/2023, and potentially four additional exploration wells on the Norwegian Continental Shelf.
Drilling Activity and Discoveries
The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) has issued a Significant Discovery Licence (SDL 1059) to Equinor for the Cappahayden K-67 discovery. The recoverable oil volume from the discovery is estimated at 385 million barrels. The 10,000-ft semisub Transocean Barents spudded the discovery well in April 2020. In October 2020, Equinor noted the well had proven the presence of hydrocarbons but that it was too early to provide specific volume information. Cappahayden is located in the Flemish Pass Basin in 974 m (3,196 ft) of water.
The Norwegian Petroleum Directorate (NPD) has granted Aker BP a drilling permit for a wildcat well in the North Sea offshore Norway. The well 25/4-15 is located in production licence 919 block 25/4 where Aker BP is the operator and ConocoPhillips is its partner. The well, targeting Ve prospect, is expected to be drilled this month, using Saipem’s 10,000-ft Scarabeo 8 semisub rig. The water depth at the site is 119 meters. Aker BP has already secured safety consent from the Norwegian Petroleum Safety Authority (PSA) to use the Scarabeo 8 rig for exploration drilling in the block. Scarabeo 8 secured the three-year contract with Aker BP, which also includes two one-year extensions, in March 2022. The rig has started the contract recently following the completion of its prior engagements and a yard stay in Norway in late 2022, which included the special periodic survey and the installation of some new systems.
Shell has made a significant gas and oil discovery at its operated Pensacola well in the Southern North Sea. The Pensacola exploration well 41/05a-2 is located on Licence P2252 in the UK Southern North Sea. Shell is the operator of the licence with a 65% interest and its partners Deltic Energy and ONE-Dyas have 30% and 5% interests, respectively. The well was spud on 21 November 2022 using the 350-ft Noble Resilient jackup rig. In January, the well encountered gas but a well testing programme had to be undertaken to evaluate its commerciality. Following well testing, partner Deltic informed on Wednesday that, at approximately 300 BCF, the discovery could represent one of the largest natural gas discoveries in the Southern North Sea in over a decade. More here…
TotalEnergies has laid out its $300 million, two-rig program on Block 2912 and 2913B in the Orange Basin offshore Namibia. The 2023 drilling program follows the company’s Venus-1 discovery made at Block 2913B in February 2022 and is intended to accelerate the time to market. The drilling program will be carried out with Vantage Drilling’s 10,000-ft drillship Tungsten Explorer, which is currently in the region and readying to start work this quarter, and Odfjell Drilling-managed 3,281-ft semi Deepsea Mira, which is currently in Norway undergoing contract preparations ahead of a start date off Namibia in mid-Q2 2023. TotalEnergies noted that this Namibia program accounts for around 50% of its exploration budget. The first rig will spud the Venus-1A appraisal well on Block 2913B in Q1 2023. After this well is completed in the second quarter of the year, the rig will move to Block 2912 to drill the Nara-1 well and associated drill stem test (DST), followed by the Nara-1A appraisal well and drill stem test scheduled for Q4 2023. The second rig will start work offshore Namibia in mid-Q2 2023 and conduct the Venus-1A and Venus-1 DSTs on Block 2913B.
APA Corp., a 50% partner in the TotalEnergies-operated Sapakara South discovery, confirmed the successful drilling and flow testing of the second appraisal well to test the previously announced discovery. Sapakara South-2 is located about 4.6 km (3 miles) south of the Sapakara South-1 appraisal well. The second appraisal well encountered approximately 36 m (118 ft) of net oil pay in high-quality Campano-Maastrichtian reservoir. Data collected from the flow test and subsequent pressure build-up indicated incremental connected resource of over 200 million barrels of oil in place. APA stated that rig activity is ongoing and focused on drilling two appraisal wells at the Krabdagu discovery, which is about 17 km (11 miles) east of Sapakara. Krabdagu-2 is currently being drilled. Later this month Krabdagu-3 will be spudded. TotalEnergies is currently operating two rigs off Suriname, drillship Noble Valiant (ex-Maersk Valiant) and Transocean’s semisub Development Driller III.
Equinor has made an oil and gas discovery close to the Troll field in the North Sea off Norway, the seventh in this area since the autumn of 2019. According to preliminary estimates, the size of the Røver Sør discovery is between 17 and 47 million barrels of recoverable oil equivalent, of which the majority is oil. The two exploration wells of the discovery – well 31/1-3 S and 31/1-3 A – were drilled by the Transocean Spitsbergen rig. The discovery is located in production licence 923 where Equinor is the operator and its partners are DNO, Wellesley Petroleum, and Petoro. The six discoveries that Equinor made earlier in this area are: Echino Sør in 2019, Swisher in 2020, Røver Nord in 2021, Blasto in 2021, Toppand in 2022, and Kveikje in 2022. An average of the various estimates of the discoveries gives a total volume of around 350 million barrels of oil equivalent, corresponding to a medium-sized Norwegian oil or gas field, and the size of the Aasta Hansteen field in the Norwegian Sea. More here…
Vår Energi has confirmed the discovery of oil in the Barents Sea offshore Norway. The discovery is located in the operated 7122/8-1S Countach well in PL229 (Goliat). The well was spud in November 2022, using the Transocean Enabler semisub rig. It is currently drilled to a 2,958m measured depth and oil has been encountered in the Realgrunnen and Kobbe formations. A sidetrack is planned to better define the size of the discovery. Vår says that extensive data is being collected for further assessment and updated information about volume estimates will be released in due course. Vår Energi is the operator of the licence with a 65% equity share and Equinor holds the remaining 35% share.
Aker BP has made an oil discovery in the North Sea offshore Norway, but the find is not profitable at the present time. The wildcat well 25/10-17 S is located in production licence 867 B, about 12 kilometres north of the Ivar Aasen field, and 187 kilometres southwest of Haugesund. It was spud in January 2023, using the 10,000-ft Scarabeo 8 semisub rig. The water depth at the site is 116 metres. The primary exploration target for the well was to prove petroleum in Middle Jurassic reservoir rocks in the Hugin and Sleipner formations. The secondary exploration target for the well was to prove petroleum in the Skagerrak Formation from the Triassic. The well was drilled to a vertical depth of 4,057 metres below sea level and was terminated in the Skagerrak Formation in the Upper Triassic. Preliminary estimates place the size of the discovery between 0.5 and 1.4 million Sm3 of recoverable oil equivalent. Initial assessments show that the discovery is not profitable at the present time. The well will now be permanently plugged and abandoned. The Scarabeo 8 will now drill wildcat well 16/1-25 S in production licence 1141 in the North Sea, where Aker BP is the operator. The rig is under a three-year contract with Aker BP, which started early this year.
Demand
3R Petroleum has released tender documents for a floating rig to operate off Brazil. The operator is eyeing a start date in October 2023. Sources indicate the term is for 14 months and targeting redevelopment of the Papa-Terra and Malombe fields. Water depths are expected to range from 450-1,600 m (1,476-5,249 ft). Responses are understood to be due by 3 March.
The Danish government has granted the country’s first full-scale CO2 storage permits in the Danish sector of the North Sea to TotalEnergies and a consortium consisting of INEOS E&P and Wintershall DEA. TotalEnergies is awarded two permits and INEOS E&P – Wintershall Dea is awarded one permit. The permits cover areas in old spent oil and gas fields as well as previously unexplored saline porous sand layers. They contain all the necessary geological structures that are suitable for future permanent CO2 storage locations. The timing and design of the final concrete CO2 storage facilities depends on the future research and investigation work. Jointly the licences cover an area of approximately 2,800 km2 in the Danish section of the North Sea and the work programmes includes, among other things, an exploration well and a seismic survey. INEOS and Wintershall DEA estimate they will able to store 1.5 tons of carbon yearly before the end of 2025 – and upwards of 8 million tons yearly in 2030. TotalEnergies estimates it will be able to store more than 5 million tons of carbon yearly from 2030.
Petrobras has released a tender for up to four floating rigs to work off Brazil starting in 2024. For Lot 1, the operator is seeking up to two DP, high-spec units capable of operating in up to 3,048 m of water, with MPD. Lot 2 is for one DP, high-spec rig capable of operating in up to 2,400 m of water, and Lot 3 is for one rig capable of operating in up to 2,400 m of water. The contract period for all lots is 1,095 days, which can be extended for up to the same period. The target start window for Lot 1 and Lot 2 is between March and November 2024, while the start window for Lot 3 is between January and November 2024. Mobilisation deadlines for Lots 1 and 2 is up to 390 days from contract signing, while for Lot 3 it is 360 days from contract signing. Bids are scheduled to be opened on 2 March 2023. Industry sources suggest most of this work is likely to be filled by units already within Petrobras’ portfolio.
ExxonMobil is seeking expressions of interest (EOI) for a floating rig capable of working in about 3,000 m (9,800 ft) of water to work off Canada next year. Industry sources indicate the scope is one well starting between May and August 2024, with the work lasting about 60-90 days and may include an option for a second well. Responses to the EOI are due by 21 February 2023.
Mobilisation/Rig Moves
Shelf Drilling’s 350-ft jackup Shelf Drilling Resourceful has moved from Nigeria to the Adriatic Sea ahead of a new contract with Eni offshore Italy. Shelf Drilling Resourceful secured a three-year contract with Eni in December 2022. The rig is expected to begin work in the Adriatic Sea offshore Italy in the second quarter of 2023. Eni has further options available for the unit. Shelf Drilling Resourceful completed its previous term with Conoil offshore Nigeria in the fourth quarter of 2022.
Other News
Indian state oil company Oil and Natural Gas Corporation (ONGC) stated that it is in talks with international companies regarding technology and partnerships for deepwater exploration offshore India. ONGC has held discussions with ExxonMobil, Equinor, Baker Hughes and French research organisation Institut Français du Pétrole. Speaking at India Energy Week 2023, ONGC Chairman and CEO Arun Kumar Singh said that deepsea investments were becoming economical. ONGC is looking at deepwater oil and gas exploration, enhanced oil recovery, boosting renewables capacity, building carbon capture capabilities and developing India’s hydrogen economy in order to make India self-reliant with regards to energy. ONGC is investing $3.5 billion in keeping up its oil and gas production.
Talos Energy received stockholder approval for the acquisition of EnVen Energy at the special meeting held on 8 February. Closing of the acquisition is expected on 13 February, subject to customary closing conditions. Talos has Seadrill’s semisub Sevan Louisiana under contract in the US Gulf until the end of this year. Meanwhile, EnVen has a charter for Transocean’s drillship Discoverer Inspiration that is set to begin in March and will run into May.
A subsidiary of Transocean will make an investment in deep-sea mineral exploration company Global Sea Mineral Resources (GSR) NV in exchange for a non-controlling interest. Transocean will also contribute the cold-stacked drillship Ocean Rig Olympia to be converted by GSR. GSR is a division of the DEME Group and is involved in exploration for deep-sea polymetallic nodules. These nodules contain minerals including cobalt, nickel, copper, manganese and rare earth metals that are used in the production of high-capacity batteries. Demand for these metals is expected to grow, partially driven by the renewable energy market. Under an agreement signed with the International Seabed Authority in 2013, GSR has a 15-year contract for prospecting and exploration for polymetallic nodules, with exclusive rights for exploration for polymetallic nodules over 76,728 square kilometres of the seabed in the eastern part of the Clarion Clipperton Zone of the Central Pacific Ocean. Ocean Rig Olympia is to be converted for a system integration test scheduled for 2025. This test is to validate the technical and environmental feasibility of recovering nodules from ultra-deepwater areas on a commercial scale. Transocean will also contribute engineering services and ultra-deepwater operating experience to the project. The 10,000-ft Ocean Rig Olympia was delivered in 2011 and acquired by Transocean in 2018 with the company Ocean Rig. The unit has been cold stacked in Greece for the past several years.
Image credit: Stena Drilling
