The offshore drilling market has remained active over the past week, with Petrobras understood to have awarded four three-year floating rig contracts while Trident Energy has exercised another option for a semisub in West Africa ahead of the contract start. Meanwhile, both floating rigs and jackups continue to move across the globe for work.
Market sources indicate that Petrobras has awarded the four public three-year contracts to Transocean, Petroserv, Foresea and Constellation. The winners were disclosed by Petrobras in the beginning of August, when newbuild drillships Deepwater Aquila and Zonda were named the winners of Lot 1, Norbe VIII was named the winner of Lot 2 and Alpha Star was named the winner of Lot 3. According to Upstream, the contract values for the awards were $504.5 million for Deepwater Aquila, $492.8 million for Zonda, $396.7 million for Norbe VIII and $343.6 million for Alpha Star. This would indicate gross dayrates of $460,000 for Deepwater Aquila, $450,000 for Zonda, $362,000 for Norbe VIII and $313,000 for Alpha Star. The awarded contracts will include a mobilisation fee and additional services/MPD, which will lead to a lower clean dayrate. Deepwater Aquila and Zonda are both newbuilds located in Korea and will likely receive a high mobilisation fee, so the clean dayrates for the two rigs are estimated to be in the low $400,000s.
Trident Energy has exercised one more option for Island Drilling’s 4,000-ft semisub, Island Innovator, in Equatorial Guinea. This is the third option being exercised, adding another 40 days to the contracted work. The previous two options were exercised in July 2023. This latest optional work is on behalf of another operator in Equatorial Guinea. Market sources indicate that the rig will be used to drill the Akeng Deep exploration well on behalf of Kosmos Energy. Trident Energy still has two more options that may be exercised. The newly exercised option will keep the Island Innovator engaged in Equatorial Guinea for a total of approximately 230 days. Island Innovator is currently working for Dana Petroleum in the UK before it will start its preparation for the work in Equatorial Guinea, which is expected to start in late 2023.
Drilling Activity and Discoveries
Enauta will conclude the drilling of the sixth of six production wells as part of its Phase I development of the Atlanta field on Block BS-4 offshore Brazil in September. After this well is completed, Enauta will begin the anchoring of FPSO Atlanta with the installation of the platform’s spread-mooring. First oil from FPSO Atlanta is scheduled for mid-2024. Production from Atlanta began in 2018 via an early production system. Enauta has been drilling the production wells at Atlanta with Constellation 9,000-ft semisubmersible Alpha Star. Once the work with Enauta finishes in September, Alpha Star is scheduled to directly begin a 424-day contract with 3R Petroleum offshore Brazil. Alpha Star is also understood to have been awarded a three-year contract with Petrobras in a recent tender.
Two more wells at the North El Amriya and North Idku (NEA/NI) development in Egyptian waters of the Mediterranean are expected to come onstream in 2023. Drilling at NEA/NI continues with Egyptian Drilling 375-ft jackup El Qaher I, which is to spud a fourth well at the development in September. The NEA and NI concessions are both 100% owned by Energean, with operations managed by Abu Qir Petroleum, a joint venture between Energean and Egyptian General Petroleum Corporation. The development reached first gas in March 2023 with the NEA #6 well coming onstream, followed by NEA #5 in July 2023. The PY #1 well was completed and tested in August 2023 and El Qaher I is expected to spud NI #1 in September 2023.
Although EnQuest delayed plans to progress its Kraken drilling program earlier this year, the company stated that it is assessing near-field drilling and subsea tie-back opportunities at the development in the UK North Sea. EnQuest announced in February 2023 that drilling at Kraken would be deferred and has cited the direct impact of the UK’s Energy Profits Levy on its cash flow as a reason for the delay. Until drilling resumes, EnQuest stated that production at Kraken will be subject to natural field decline. EnQuest said that interpretation of 3D seismic data is ongoing and there is the possibility of main field side-track drilling opportunities and further drilling within the Pembroke and Maureen sands.
Energean expects to spud the Izabela-9 well offshore Croatia during the fourth quarter of 2023, adjusted from the second to third quarter start date anticipated earlier in the year. The Izabela natural gas field is located in the Adriatic Sea. Energean has a 70% interest in the Izabela contract area, with the remaining 30% held by INA.
Borr Drilling 400-ft jackup Hild has arrived in Mexico and is preparing to begin a 725-day contract with Fieldwood Energy. The contract with Fieldwood is the maiden charter for Hild, which was delivered from Keppel FELS in Singapore in 2020. Hild was warm stacked in Singapore between its delivery and its mobilization to Mexico earlier this year. Fixed in April 2023, the Fieldwood contract covers a firm term of 725 days with an estimated contract value of $123 million, including mobilization and demobilization fees.
Saipem 12,000-ft drillship Santorini is leaving the US GOM and is expected to arrive in Egyptian waters of the Mediterranean in late September 2023. The unit is currently under a two-year contract extension with Eni, secured in April 2023. The two-year term, which began in August 2023, is valued at around $280 million. Santorini was previously working for Eni in the US GOM from March 2022 until August 2023. Eni’s partner Energean stated that Eni is expected to commence drilling the Orion-1X exploration well on the North East Hap’y Concession offshore Egypt in the fourth quarter of 2023. The drilling of this well was previously delayed due to rig availability. Energean is finalising the farm out of 11% of its working interest in the concession, leaving it with a 19% interest.
The 12,000-ft drillshipDeep Value Driller has been delivered to Saipem under a three-year bareboat charter secured in 2023. Under this charter, the recently-reactivated rig will move from Norway to Cote D’Ivoire for work with Eni. The bareboat charter has an estimated firm period of three years with options for extensions. Rig owner Deep Value Driller AS stated that the bareboat charters adds around $160 million of firm revenue backlog to the group. Deep Value Driller left the Westcon yard in Norway in late August 2023. Saipem secured a drilling contract with Eni for Deep Value Driller in February 2023. Valued at $400 million, this drilling contract is expected to see the rig carry out work at the Baleine field.
Azule Energy, in partnership with Equinor, has signed a production sharing agreement for Block 31/21 offshore Angola with the country’s National Agency of Petroleum, Gas and Biofuels (ANPG). Azule will operate the block with a 50% interest. The block covers around 4,500 square kilometres in deepwater areas of the Lower Congo Basin. Azule’s contract includes the drilling of one exploration well during the initial five-year exploration period. Azule Energy noted that there have been 12 previous discoveries on Block 31/21 existing infrastructure in the area from the Block 31 PVSM development. Azule Energy is a joint venture between BP and Eni, combining the two companies’ Angolan businesses. Azule Energy is currently working offshore Angola with the 12,000-ft Saipem drillship, Saipem 12000. Recently, the 12,000-ft Valaris drillship, Valaris DS-7, secured a 12-well contract in West Africa, which is understood to be with Azule Energy.
Petrobras has terminated the previously-announced divestment processes for a number of assets, including the Manati field, a natural gas field in the Camamu Basin off the coast of Bahia, Brazil. The company also terminated the divestment processes for the onshore Urucu Cluster and Bahia Terra Cluster, and Argentinian subsidiary Petrobras Operaciones S.A