It was a quiet week in the offshore industry as operators and drilling contractors are preparing to release their Q3 2023 earnings. Nonetheless, a couple of interesting rig moves are in progress, with one semisub unit leaving and another one arriving in Norway.
In case you missed it, you can access our previous Rig Market Roundup here.
Contracts
White Eagle LLC managed 300-ft jackup Map Driller I has been awarded a contract with Iranian Offshore Oil Company (IOOC) in Iranian territorial waters of the Persian Gulf. Market sources indicate that the newly awarded contract could be for an estimated duration of two years, and it will start a month after the current contract. The rig is currently working for Petropars in Iran and is expected to end operations in November 2023.
Drilling Activity and Discoveries
Kosmos Energy has made an oil discovery at the Tiberius exploration well in the U.S. Gulf of Mexico, using the 12,000-ft drillship Noble Valiant. Kosmos is the operator of the Tiberius well and has a 33.34% working interest alongside Occidental and Equinor (both 33.33%). The well is located in approximately 7,500 feet (2,300 metres) of water. It was drilled to a total vertical depth of approximately 25,800 feet (7,800 metres) with the Noble Valiant, which arrived in the Gulf of Mexico in July 2023. The Tiberius exploration well tested a four-way structural trap in the outboard Wilcox trend, located in Keathley Canyon Block 964. The well encountered approximately 250 feet (~75 metres) of net oil pay in the primary Wilcox target. Wireline logging has been completed, and casing is currently being run to the target depth to enable the well to be used as a future oil producer. Kosmos will now undertake rock and fluid analysis to confirm the production potential of the reservoir and will work with partners on subsea development options. The discovery is located approximately 6 miles southeast of the Occidental-operated Lucius SPAR production facility, enabling a short tie-back in the event of a development. The drillship has two further contracts lined up, including a six-month deal with LLOG.
A total of 48 development wells were drilled and 12 exploration and appraisal wells completed in the UK in 2022, which is below the country regulator’s baseline ambition of 60 development wells drilled per year to help slow the ongoing decline in production and secure a greater proportion of domestically-produced hydrocarbons. The North Sea Transition Authority (NSTA) believes it is important that appraisal and development of 334 mmboe of potential hydrocarbons discovered in the past three years is undertaken quickly in the drive to achieve domestic oil and gas production as the energy transition progresses. There were 48 development wells spudded in 2022, which is down from 62 in 2021 and 73 in 2020. Of the 48 wells in 2022, 40 are producers and 8 are water injectors. The total well count was down from the previous year, but the total development well spend of £1.23bn in 2022 was only slightly lower than the £1.33bn in 2021, indicating that the average wellbore cost in the UKCS has risen. Similarly, well interventions dropped from 566 in 2020 to 522 in 2021 to 511 in 2022. Exploration & Appraisal (E&A) wells remained steady with 12 in 2022, up two from the previous year. Total well stock has reduced steadily as fields reach the end of their lives and cease production, and this reduction is likely to continue with more fields reaching cessation of production (CoP) by 2030. The regulator is concerned that operators only achieve around 60% of their projected drilling activity and wants to see that figure substantially improve. Operators currently suggest that activity may pick up as they forecast, with high and moderate confidence, that 77 E&A wells will be drilled between 2023-25. Of these 77, 12 are forecast for 2023, 17 for 2024, and the remainder for 2025.
Norway’s Petroleum Safety Authority (PSA) has granted Equinor consent for the use of the 10,000-ft semisub Deepsea Aberdeen for production drilling, completion and exploration drilling at Svalin field off Norway. Svalin is a field in the central part of the North Sea, six kilometres southwest of the Grane field. The water depth in the area is 120 metres. It is located in production licence 169, which is operated by Equinor, with Petoro and Vår Energi participating as partners. Svalin was discovered in 1992, the plan for development and operation (PDO) was approved in 2012, and production started in 2014. The consent has now been granted for the Deepsea Aberdeen to drill wells 25/11-H-2 YH and 25/11-H-1 H/AH. The Odfjell Drilling-managed rig has been under contract with Equinor since mid-2022, working on the Breidablikk field in the North Sea. In late September 2023, the Norwegian Petroleum Directorate (NPD) granted its consent for the start-up of this field. The Svalin workscope was added to the rig’s backlog in May 2023. The new wells, which will be drilled starting in Q4 2023, have an estimated duration of 174 days. Once this work has been completed, the rig will return to Breidablikk for a scope that is firm into Q2 2025, with options thereafter.
Demand
Oil India has cancelled its jackup tenders for the East Coast and West Coast of India. According to market sources, Oil India has recently decided to cancel two of its jackup tenders. The first tender IFB No. CEG2484P23 was for 180 days plus 30 days for well testing if carried out, giving a total of 210 days and the second tender IFB No. CEG2625P23 was for 75 days, including well completions. No specific reasons were disclosed for the cancellation of these tenders. Nevertheless, there is widespread anticipation that Oil India will soon announce a fresh tender for operations on the East Coast of India.
Baron Oil is planning to drill the appraisal well Chuditch-2 on the TL-SO-19-16 Production Sharing Contract, offshore Timor-Leste. The appraisal well is expected to be drilled in late 2024, subject to drill financing, and will utilize a jackup. The drilling program will take approximately 21 days to drill, with an additional 15 days assumed for logging and a drill stem test. The water depth is 60m (196ft.) and the well will be drilled to 3,200m (10,492ft.) below mean sea level.
Mobilisation/Rig Moves
Noble’s 492-ft jackup unit, Noble Intrepid, has left Kishorn Port and re-located to Aberdeen ahead of its contract with Harbour Energy in the UK. The CJ70 unit last worked for OMV in Norway up until late 2022, after which it moved to the UK, where it had been for about ten months. The rig arrived in Aberdeen on Monday, 9 October where it will prepare for its upcoming contract with Harbour. The ten-month contract for the provision of accommodation services at the Judy field was announced in August, and it’s expected to start in December 2023. The contract contains options to add up to five months of accommodation and well intervention services, which could keep the rig busy into early 2025.
Transocean’s Cat D semisub, the 1,640-ft Transocean Endurance, has left Norway and is en route to Singapore ahead of its P&A contract in Australia. The Transocean Endurance last worked for OKEA this summer in Norway under a two-well contract from May 2023. Following the completion of this contract, the rig had been warm stacked in Norway ahead of a new contract with Woodside in Australia, which is expected to begin in early 2024 and includes the permanent plug and abandonment of wells in the Stybarrow field. The P&A contract, announced in late March 2023, has an estimated duration of 240 days plus a series of options. The first of five options has already been exercised, and the rig is firm into early 2025, with further options into late 2025. The rig is now being transported to Singapore by COSCO Shipping’s heavy-lift vessel Xin Guang Hua, where it’s expected to arrive in early December 2023.
COSL’s harsh-environment semisubmersible, the COSLProspector, is en route from China to Norway ahead of a new contract in the Barents Sea. Following the completion of its work with CNOOC in China, the 4,921-ft semisub mobilised earlier in October for a journey that is expected to last about four months. The rig’s next stop is Port Louis, Mauritius, where it’s expected in early November. Once it reaches Norway, it will prepare for its upcoming contract with Vår Energi. The contract was secured in August 2023 and is expected to begin in Q3 2024. It is firm for two years, with an option for an additional three years, which could keep it busy into Q3 2029. Vår Energi will use the rig to drill exploration and appraisal wells, along with certain production wells.
Image credit: COSCO Shipping Heavy Transport
