The first week of this year brought with it announcements about new contract awards for five Transocean rigs, more work for Island Drilling's semisub, two new deepwater discoveries in the Gulf of Mexico, and plans for a new well in the UK North Sea.
In case you missed it, you can access our previous Rig Market Round-Up here.
Contracts & tenders
Zhejiang Shipping Exchange has announced the auction of SS Pantanal is scheduled for 9 February 2023. The semisub was delivered in 2010 and has been stacked since 2015. It is currently stacked at Sembawang Shipyard in Indonesia and is under the management of COSL Oil-Tech, a subsidiary of COSL. The unit has not been dry-docked since its delivery and is being sold as-is, where-is. The starting bid price is $8 million, with a deposit of $0.8 million. Bid increments will be accepted in multiples of $0.2 million. Registration for the auction ends on 9 February before the auction commences. SS Pantanal was retired in 2021. It last worked off Brazil in 2014.
Shelf Drilling has secured a further 12-month extension for the 375-ft Shelf Drilling Tenacious jackup rig in Angola. This latest extension comes in direct continuation of its current contract for drilling operations offshore Angola. As a result, the rig is now committed until November 2024. The jackup has been under contract with Cabinda Gulf, the affiliate of Chevron in Angola, since early 2022.
The 12,000ft 7th Generation drillship West Dorado has been sold to Eldorado Drilling, a newly established company owned by a group of investors. The sales price is understood to be just over $200 million, and Esgian Rig Values estimate the market value in the range of $235 – 260 million. The drillship was first ordered by Seadrill in 2013, but was later cancelled following the company’s restructuring in 2018. Samsung Heavy Industries then assumed ownership of the unit.
Offshore drilling contractor Transocean has confirmed contract awards or extensions for five floating rigs, representing around $488 million of firm backlog added for these units working in the US GOM, Suriname and the North Sea. The 12,000-ft drillship Deepwater Invictus was awarded a new three-well contract with an undisclosed independent operator in the US GOM. This contract is expected to run for around 100 days and commence in direct continuation of the rig’s current program, contributing around $43 million in backlog. In Suriname, TotalEnergies exercised a one-well option for the 10,000-ft semisub Development Driller III. This well is expected to take 90 days and contributes around $32 million in backlog. More here…
Odfjell Drilling on behalf of CIMC OFFSHORE has agreed on a new contract with PGNiG Upstream Norway for the use of the 3,900-ft rig Deepsea Yantai. The contract includes the drilling of one firm well, “Tomcat”, in PL 1055 in the Norwegian Sea, with the option to drill two further wells in 2024. The firm scope of work is estimated to take 55 days and will begin in Q2/Q3 2024. As a result of the signing of this contract, the firm backlog for the Deepsea Yantai is now expected to extend into Q3 2024. This year, the rig has contracts lined up with OMV, Wellesley, DNO, and Neptune Energy. Starting in late 2023, the rig will then enter 2024 working for Shell to be followed by this latest deal with PGNiG.
Island Drilling has announced that the optional work with Dana Petroleum for the 4,000-ft Island Innovator rig has been exercised. The semisubmersible rig’s total work with Dana Petroleum in the UK is estimated to take 110 days. The work is planned to begin in April 2023. The rig is also expected to work in Equatorial Guinea later this year.
ONGC has launched a tender to contract two ultra-deepwater drillships for a duration of 21 months starting in Q3 2023. The operator requires two DP ultra-deepwater drillships that are capable of operating in water depths of 3,000m (9,000ft.). The contract start-up is six months after the contract award, which would likely happen in Q3 2023 as bids are due by the end of this month. ONGC launched a similar tender in Q1 2022 for exploration and development drilling offshore east coast India, but the tender was postponed. Back then, Transocean’s Dhirubhai Deepwater KG2 was reported as the frontrunner with dayrate levels in the mid-$400,000s.
Drilling Activity and Discoveries
TotalEnergies has encountered signs of hydrocarbons following appraisal drilling at the Isabella discovery located in the Central North Sea of the UKCS but the commerciality of the reservoir is yet to be established. The appraisal drilling was conducted in the P1820 in Block 30/12d-12, about 25 miles south of TotalEnergies’ Elgin Franklin field. Isabella partners are Ithaca Energy, Neptune Energy, and Energean. The appraisal well 30-12d was drilled using the 400-ft Noble Sam Hartley, to be renamed Shelf Drilling Fortress, jackup rig. Hydrocarbons were encountered in Upper Jurassic and Triassic sandstone reservoirs, with 148 feet (or 45 meters) of net thickness. Logging while drilling and wireline logs were acquired to establish reservoir quality. TotalEnergies intends to complete the gathering of data, plug and abandon the well, and evaluate the drilling results to establish the commerciality of the reservoir. The well was drilled to a total depth of 15,600 feet (or 4,754 meters) in water depths of 262 feet (or 80 meters).
Talos Energy has confirmed discoveries at its Lime Rock and Venice prospects in the US Gulf of Mexico. Seadrill’s 10,000-ft semisub Sevan Louisiana drilled both wells. Lime Rock is located in Viosca Knoll Block 1000 in 4,179 ft of water. Venice is located in Viosca Knoll Block 912 in 2,358 ft of water. The wells encountered 78 ft and 72 ft, respectively, of net hydrocarbon pay in the primary targets. Both wells will be tied to the 100% Talos-owned Ram Powell platform, which is 9 miles from Lime Rock and 4 miles from Venice. Completions are expected in the second half of 2023, followed by first production in Q1 2024. The next wells in the rig programme are Rigolets and Lisbon. Sevan Louisiana is chartered to Talos until the end of 2023.
Norway’s Equinor has secured consent from the country’s Petroleum Safety Authority (PSA) to use the 2,460-ft COSLPromoter rig for production drilling on a North Sea field. The PSA informed that the COSLPromoter will be used on the Statfjord Øst field. The consent covers plugging and abandonment (P&A) activities and drilling of production wells on the field. Statfjord Øst is a field in the Tampen area in the North Sea, seven kilometres northeast of the Statfjord field. The water depth in the area is 150-190 metres.
Demand
Trinidad and Tobago’s Ministry of Energy and Energy Industries stated that it will be engaging in discussions and negotiations with bpTT and Shell Trinidad and Tobago with respect to their bids for four deepwater blocks. These discussions are expected to begin in January 2023. The consortium of BP and Shell made offers on blocks 23(b), 25(a), 25(b), and 27 in Trinidad and Tobago’s 2021 Deep Water Competitive Bid Round. These bids were opened on 2 June 2022.
The US Bureau of Ocean Energy Management’s Cook Inlet Oil and Gas Lease Sale 258 generated one bid for one tract; a $63,983 bid submitted by Hilcorp Alaska LLC for Block 6255 in Alaska’s Cook Inlet. The lease sale was held on 30 December 2022. A total of 193 blocks were offered in this sale. Before a lease is awarded, the bid will go through a 90-day evaluation process by the BOEM and a Department of Justice review of antitrust considerations.
Ithaca Energy and its partner Dana Petroleum have made the decision to carry out exploration drilling in the Central North Sea, targeting the K2 prospect. The K2 prospect is located in License P2382 in Block 22/14c. As a 50% working interest holder, and operator, Ithaca Energy will incur 50% of the drilling costs. Exploration drilling at the K2 prospect is expected to begin between June and July 2023 for approximately 41 days in order to determine the presence of hydrocarbons. The water depth at the drilling site is 294 feet (approximately 90 meters) and the final planned depth of the drilling is 9,000 feet (approximately 2,743 meters). Drilling is targeting the Forties Member sandstones. The total gross cost of drilling is estimated at £17 million in a dry hole case. In the case of success, further gross costs estimated to be in the region of £17 million will be incurred, providing a total success cost of £34 million (net to Ithaca Energy: £17 million).
Three bids for two blocks were made in the Open Uruguay Round: Second Instance 2022. OFF-4 received bids from YPF and a consortium of APA Exploration and BG International, which is a Shell group company, while OFF-5 received a single bid from YPF. Following analysis by Uruguay’s state-owned oil company ANCAP, the APA/Shell joint bid was selected as the winner for OFF-4. The committed work scope for this block includes the acquisition of new 3D seismic. Once the bids are formally approved, ANCAP will request authorisation from the Executive Branch to sign the contracts for each block.
Egypt launched its 2022 International Bid Round for Petroleum Exploration and Exploitation in late December 2022, offering six blocks for exploration in the Mediterranean Sea and six blocks in the onshore Nile Delta area. The closing date for the bid round is 30 April 2023. The bid round is being overseen by the Egyptian Natural Gas Holding Company (EGAS). The six offshore blocks on offer in this round include EGY-MED-E4 (North Port Fouad), EGY-MED-E7 (South Nour), EGY-MED-E8 (East Port Said), EGY-MED-E13 (East Alexandria), EGY-MED-W8 (North Agiba), and EGY-MED-W9 (North Habata). Data sets for companies interested in blocks on offer are available at https://eug.petroleum.gov.eg/
Mobilisation/Rig Moves
Borr Drilling 400-ft jackup Norve has started work with BW Energy offshore Gabon after undergoing a special periodic survey. The rig concluded operations with Vaalco offshore Gabon in November 2022 and then underwent the scheduled survey. Norve is now working for BW Energy into August 2023 with an option to extend. BW Energy is using the rig to drill at the Hibiscus/Ruche development.
Other News
Reabold Resources has completed the acquisition of Simwell Resources, which holds several North Sea licences. The acquisition to acquire Simwell at a low acquisition cost with a total initial consideration, plus the repayment of all outstanding creditors/liabilities, of £1 million was announced on 28 September 2022 and the completion on 3 January 2023. The transaction increases Reabold’s footprint in the emerging Zechstein trend. More here…
Image: Transocean Barents – Credit: Equinor
