Several new contract awards were announced for the floating rig segment this week, adding new backlog to rigs in India, Brazil, and the US Gulf of Mexico. Meanwhile, plans are in progress for new wells in the North Sea and the Barents Sea off Norway.
In case you missed it, you can access our previous Rig Market Roundup here.
Contracts
The 300-ft jackup unit PV Drilling I has completed its contract with Vietsovpetro, offshore Vietnam, and has now commenced a new contract with Northern Gulf Petroleum (NGP) at Block G6/48, offshore Thailand. The jackup signed its contract with NGP in June 2023, and the contract has a duration of 60 days. The rig was previously drilling at Thang Long in Vietnam, but completed this contract earlier this month before the contract with NGP. After completion, the jackup will move to Malaysia, where it will commence a one-year contract with an undisclosed operator.
Transocean released its latest quarterly fleet update, which includes updates on drillship contracts in Brazil, US Gulf of Mexico, and India. The 12,000-ft drillship Dhirubhai Deepwater KG1 was awarded a 21-month contract with ONGC in India at a dayrate of $347,500 and a 60-day extension with Reliance at a dayrate of $348,000. The 7th Generation drillship Deepwater Invictus was awarded a 20-day contract in the US Gulf of Mexico with Woodside at a dayrate of $440,000 (and the well has been completed). Meanwhile, the recently purchased newbuild Deepwater Aquila was awarded a three-year contract with Petrobras in Brazil at a dayrate of $448,000. The aggregate incremental backlog associated with the listed fixtures is approximately $745 million, while the company’s total backlog is approximately $9.4 billion.
Dolphin Drilling has received a Letter of Award (LOA) for a job in India with its semisubmersible Borgland Dolphin. Dolphin Drilling was announced as the lowest bidder in this rig tender on 14 September 2023.The LOA is for a drilling campaign with Oil India Limited for a 14-month firm period, extendable by another 7 months. It is subject to a signed final contract. The 1,500-ft Borgland Dolphin had been working in the North Sea over the years, and its last job there was with Wellesley Petroleum in Norway. This work ended in early 2022, and the rig has been smart stacked ever since.
Drilling Activity and Discoveries
The Shelf Drilling-owned 350-ft jackup, Key Singapore, has commenced operations with Oil and Natural Gas Corporation (ONGC) in Mumbai High, offshore India. The Key Singapore secured the three-year contract in December 2022. Prior to this award, the rig was working for Cairn in India. Following the completion of this contract, the jackup had an out-of-service period to carry out ONGC’s contract preparations. The rig is expected to remain under this contract into October 2026.
Dana Petroleum has made a new hydrocarbon discovery after drilling the Earn-1 well that sits immediately to the west of the producing Tolmount field in the UK sector of the North Sea. The Earn-1 exploration well is located in the Southern North Sea, block 42/27. It was drilled using the 400-ft heavy-duty harsh environment jackup, Valaris 121. The rig started the one-well contract with Petrofac, which is managing these operations on behalf of Dana as the operator, in early July. According to Dana, all components of the petroleum system have been proven by well 42/27-4. The reservoir is gas-saturated with thickness and properties within Dana’s pre-drill range of expectations. Net thickness, quality, and fluid content of the Permian-age Leman Sandstone reservoir section have been evaluated using a series of logs, cores, and pressure measurements. Dana is now executing a sidetrack well 42/27-4Z in order to confirm understanding of the scale of this accumulation and to potentially establish commerciality. In late September, the UK regulator granted approval to adjust the drilling of the sidetrack well from the main wellbore, which resulted in an increase of depth of an additional 392 metres. There will now also be coring of the sidetrack, which was previously not applied for. Following the completion of operations for Dana, the rig is scheduled to begin its 210-day contract with Shell, also in the UK North Sea. Shell also has four priced options.
The Norwegian Petroleum Directorate (NPD) has granted Aker BP a drilling permit for three wells in the North Sea offshore Norway. The wells 30/12-3 S, 30/12-3 A (sidetrack), and 30/12-3 B (potential sidetrack) are located in production licence 272 B, which is operated by Aker BP with Equinor as a partner. The wells are targeting prospects: Surtsey, Jolnir (sidetrack), and Brandur (potential sidetrack). Aker BP will use the Odfjell Drilling-managed 10,000-ft semisub, Deepsea Stavanger, for these operations. The water depth at the site is 106 metres. Drilling is planned to start in November, with a duration of 93 days upon discovery.
Norwegian operator Aker BP is preparing to drill three exploration wells east of the planned Wisting field development located in the Barents Sea off Norway. The Norwegian Environment Agency (Miljødirektoratet) has received an application from Aker BP for permission under the Pollution Act to drill the exploration wells 7324/6-2 Ferdinand Nord, 7234/8-4 Hassel, and 7324/6-3 Viasat in the Barents Sea. The wells are located 194–201 km from Bjørnøya and approx. 260 km from the mainland (Nordkapp). Drilling is planned to start on 1 February 2024 at the earliest, with a duration of 26, 20, and 20 days, respectively, totaling just under 70 days. Aker BP will use Saipem’s 10,000-ft semisub Scarabeo 8 for these wells. The rig has been working for the operator since early 2023, with the firm part of the contract scheduled to end in early 2026. When it comes to the Wisting field, Equinor is the operator in the development and operations phase and Aker BP is one of the partners. In November 2022, the partnership decided to postpone the investment decision previously scheduled for December 2022. The maturation of the project continues, aiming for an investment decision by the end of 2026.
Woodside has confirmed that its Gemtree exploration well offshore Australia was unsuccessful, encountering only minor gas shows in the primary target. The well is on permit WA49-L in the Barrow sub basin in around 663 feet of water. The well was drilled with a Diamond Offshore 6,000-ft semisubmersible, Ocean Apex. The rig is remaining in Australia into 2025 for work lined up with Chevron, Inpex, and Santos.
Demand
Saudi Aramco (Aramco) has cancelled its Lump Sum Turnkey (LSTK) tender for up to 5 jackups of 2000HP each and associated services. In the second quarter of 2022, Aramco released a Lump-Sum Turnkey (LSTK) tender, aiming to procure services for up to 10 jackup rigs and associated operations to drill and complete a total of 216 wells within a three-year timeframe. Additionally, there was an option to extend the project, encompassing up to 144 more wells within two years. The targeted areas for this extensive endeavour were the offshore fields of Zuluf, Rubyan, and Safaniyah in Saudi Arabia. In the second quarter of 2023, Aramco assigned and allocated five specific rigs from its working fleet for the LSTK tender. Based on this, the scope of work of the cancelled tender was revised to five jackup rigs and associated services to drill and complete 108 wells for the initial term of 3 years plus a total of 72 wells for the optional period of 2 years. The latest anticipated spud date was Q1 2024.
Mobilisation/Rig Moves
P&A specialist Well-Safe Solutions is preparing to mobilise its semisubmersible Well-Safe Guardian to the North Sea. The 1,500-ft rig has been moored at the Firth of Forth anchorage throughout the summer preparing for its P&A workscope with Repsol Sinopec, which was paused in 2022 to allow the rig to pass to CNR. During this period, Well-Safe installed and tested a D300 saturation diving system on the rig. Equipped with an electric bell-handling system and two hyperbaric lifeboats, the system is designed to enable diving operations to be carried out in support of well decommissioning. Previously, the rig was also upgraded with the Trident Intervention System, which can be configured for hydraulic intervention, riserless light well intervention, and open water intervention riser operations. OSVs Maersk Lifter and Maersk Achiever will be handling these rig move operations for Well-Safe, and, should weather conditions allow, the unit is expected to set off to the Buchan field in the North Sea around the end of the week. The rig is expected to remain with Repsol Sinopec throughout 2024.
Transocean 12,000-ft DSME 12000 design drillship Deepwater Aquila has been delivered from the Hanwha Ocean yard in South Korea and is now en route to Singapore where it will undergo contract preparations before heading to Brazil for work with Petrobras. Previously known as West Aquila, the 7th generation drillship was originally ordered from DSME, now Hanwha Ocean, by Seadrill. This contract was cancelled in 2018. In late 2022, the rig was acquired by Liquila Ventures, a joint venture between Lime Rock Partners, Perestroika A.S., and a subsidiary of Transocean. In September 2023, Transocean secured a three-year contract for the rig with Petrobras offshore Brazil valued at $486 million and scheduled to begin in the third quarter of 2024. Transocean also acquired its partners’ interest in Liquila Ventures, solidifying its ownership of Deepwater Aquila.
Odfjell Drilling-managed 10,000-ft semisubmersible Hercules is expected to arrive in Namibia in early November 2023 and spud the first of two exploration wells for Galp Energia by mid-November. Galp has the rig contracted for a two-well campaign plus optional well testing on PEL 83 in Namibia’s Orange Basin. The drilling campaign is targeting the Mopane complex at the southern end of the licence. The harsh environment semisubmersible is scheduled to return to Canada for a job with Equinor after it completes the drilling campaign in Namibia. Hercules is owned by SFL Corporation.
Other News
The Brazilian National Agency for Petroleum, Natural Gas and Biofuels (ANP) is offering 33 exploration blocks in offshore and onshore areas in the fourth cycle of its permanent concession offer bid round. Offshore blocks on offer for oil and gas exploration in this round include 12 blocks in the Pelotas Basin, one in the Potiguar Basin, and four in the Santos Basin. A public session to present the offers will be held on 13 December 2023. Bid approvals and the signing of concession agreements will take place in the first half of 2024.
Shell subsidiary, Shell Upstream Overseas Services (I) Limited (SUOS), has completed the previously announced sale of its 35% participating interest in Indonesia’s Masela Production Sharing Contract (Masela PSC) to Indonesia’s PT Pertamina Hulu Energi and Petronas Masela. This divestment is in line with Shell’s focus on disciplined capital allocation. The sale, announced in July 2023, includes the Abadi gas project. INPEX holds a 65% operating interest in Masela PSC and is the operator of the Abadi gas project. This is located in the Masela block, 150 kilometres offshore Saumlaki in Maluku province, Indonesia. The completion of the sale follows regulatory approval from Indonesia’s Ministry of Energy and Mineral Resources for the transfer of SUOS’ stake to PT Pertamina Hulu Energi Masela and Petronas Masela.
Norwegian energy company Equinor has signed a memorandum of understanding with Libya’s National Oil Corporation, aiming to study and evaluate oil and gas potential in Libya’s maritime sector. The memorandum also includes plans to train young Libyans in the oil and gas sector.
Brazil’s Agência Nacional do Petróleo, Gás Natural e BiocombustÃveis (ANP) is offering five offshore blocks in the second cycle of its permanent production sharing offer programme. The public bid round will be held on 13 December 2023. Blocks on offer include Cruzeiro do Sul, Esmeralda, Jade, and Tupinambá in the Santos Basin and Turmalina in the Campos Basin. Six companies have qualified to present offers in the public bid round; BP Energy do Brasil Ltda., Chevron Brasil Óleo e Gás Ltda., QatarEnergy Brasil Ltda., Shell Brasil Petróleo Ltd. and TotalEnergies EP Brasil Ltda. Qualification in the permanent production sharing offer program takes place before the public session. These companies will also be able to present new declarations of interest and additional offers until 8 November 2023.
Northern Drilling has decided to seek leave to appeal the arbitration tribunal’s awards between the company’s subsidiaries, West Aquila Inc, and West Libra Inc., and Hanwha Ocean. In September, the arbitration awards from the tribunal were found in favour of Hanwha Ocean, dismissing West Aquila Inc. and West Libra Inc’s previous claims regarding delivery delays and breach of contract. Northern Drilling has decided to seek leave to appeal the awards on a point of law and to challenge the awards on grounds of serious irregularity. The company will require funding to appeal and challenge the awards and plans to raise capital through one or more equity placements during the appeals process. The first equity placement will be in the range of $3–3.5 million.
