It was a quiet week in terms of new rig contract awards, but it was eventful for oil and gas nonetheless as the UK finally approved Equinor's Rosebank project, enabling the operator to reach the final investment decision. Meanwhile, the size of TotalEnergies' Venus discovery off Namibia could be at least 1 to 2 billion barrels.
In case you missed it, you can access our previous Rig Market Roundup here.
Contracts
TotalEnergies has exercised a second 110-day priced option for Vantage Drilling 12,000-ft drillship Tungsten Explorer, keeping the rig under contract into the second quarter of 2024. TotalEnergies has been using the rig for a drilling program offshore Namibia. TotalEnergies has a third priced option available for the unit, which if exercised would keep the rig working into early 2025.
Gulf Drilling International (GDI) has secured a new contract for the 300-ft Les-Hat jackup to work for Shell. Under this new contract, the rig will remain in operation within Qatar. The contract is expected to begin in early October 2023 and has a firm term duration of two years, plus two one-year extension options. Before this contract, the rig had been engaged with Qatar Gas since the fourth quarter of 2017. This campaign concluded in the second quarter of 2023 and, after that, the rig underwent its five-year special periodic survey (SPS) ahead of the new contract with Shell.
Drilling Activity and Discoveries
Trillion Energy plans to drill five new sidetracked production wells from existing platforms and at least one exploration well at the SASB gas field in the Black Sea offshore Turkiye as part of its 2024 activities. The company has announced a capex budget of $26 million for this SASB work. Trillion Energy wrapped up its most recent drilling campaign at the SASB field with GSP 333-ft jackup GSP Uranus in August 2023.
TotalEnergies has confirmed that its Nara-1X exploration well on Block 2912 in the Orange Basin offshore Namibia did not find oil but noted that the company has carried out a positive appraisal at Venus-1A and a positive flow test at Venus-1X on Block 2913B. TotalEnergies has been drilling offshore Namibia with Odfjell Drilling 3,281 semisubmersible Deepsea Mira and Vantage Drilling 10,000-ft drillship Tungsten Explorer. Tungsten Explorer was used to drill Nara-1X. Deepsea Mira re-entered and side-tracked the Venus-1X discovery well and flowed oil from the test with positive results. TotalEnergies and its partners are now interpreting the results of the flow test and incorporating them into the development studies. Results are expected to be confirmed with the flow test of Venus-1A in the fourth quarter of this year. The Venus-1A appraisal well was drilled by Tungsten Explorer. Deepsea Mira will re-enter the well to carry out a drill stem test. TotalEnergies will be drilling further appraisal wells and prospects offshore Namibia as well as carrying out 3D seismic acquisition. Tungsten Explorer will next drill the Mangetti-1X exploration well in the northern part of Block 2913B. TotalEnergies CEO Patrick Pouyanne said that there would be a development offshore Namibia and while the size of TotalEnergies Venus find has yet to be determined, it could be at least 1 to 2 billion barrels.
TPAO has started drilling the Filyos-1 well in the Black Sea offshore Türkiye with the Fatih drillship. The Filyos-1 well follows the Amasra-3 and the Amasra-2 wells drilled with the same drillship in the Sakarya gas field earlier this year. The 10,000-ft drillship has been working for TPAO since early 2018. It is one of four TPAO-owned drillships active offshore Türkiye, including the 10,000-ft Yavuz and Kanuni, and the 12,000-ft Abdülhamid Han.
Demand
Trinidad and Tobago’s cabinet has approved the award of three deepwater blocks to a consortium of bp and Shell. The award ceremony will take place on 26 September 2023, with the parties signing production sharing contracts for the blocks. Trinidad and Tobago’s Ministry of Energy and Energy Industries began discussions with bp and Shell in late 2022 after the consortium made offers on blocks 23(b), 25(a), 25(b), and 27.
Reabold Resources and its partners in the Dunrobin licence in the UK North Sea plan to re-engage with interested parties related to the drilling of an exploration well on the licence where a ‘Drill or Drop’ decision is required by mid-July 2025. Dunrobin is located in licence P2478 where Reabold (Admin) has a 36% interest, Baron Oil 32%, and Upland Resources 32% interest. In July 2023, the joint venture announced that it had been granted a two-year extension to Phase A of the licence by the UK North Sea Transition Authority (NSTA). The additional commitment is to acquire a minimum of 30 square kilometres of 3D seismic data which will complete the 3D coverage over the Dunrobin West prospect. Plans for execution of this new seismic programme during the first half of next year are underway with contractors, stakeholders, and the NSTA. On completion of this work, aimed primarily at further reducing pre-drill risks and volumetric uncertainty, the partners intend to re-engage with potentially interested third parties in respect of the drilling of an exploration well. A ‘Drill or Drop’ decision on P2478 is required on or before 14 July 2025.
Baron Oil is assessing the availability of suitable rigs for the drilling of an appraisal well on the Chuditch production sharing contract (PSC) offshore Timor-Leste. The company’s priority this year continues to be the preparation for the drilling and testing of an appraisal well on the Chuditch-1 gas discovery. A decision on drilling the Chuditch appraisal well is expected on or before 18 December 2023. Technical activities during 2023 have been focused on further detailed interrogation of data, to identify optimal candidate locations for Chuditch appraisal drilling, including additional geophysical work and environmental impact studies. Based on these studies, Baron selected a preferred appraisal drilling location, which is approximately 4.8km from the Chuditch-1 discovery well. This location is now being input into the detailed well planning programme. In anticipation of the proposed drilling of an appraisal well, the company is in discussions with various contractors and is actively assessing the availability of suitable rigs, equipment, and personnel.
Adani is requesting expressions of interest (EOI) for drilling and sandface completion of development wells offshore India. Adani Welspun Exploration Limited is planning to conduct drilling and sandface completion activities of 11 to 15 platform-based development wells within Block MB-OSN-2005/2 / Contract Area MB/OSDSF/B9/2016 during its upcoming development campaign scheduled to commence in the first half of 2025. The deadline for responding to this EOI is set for 3 October 2023.
Mobilisation/Rig Moves
Noble 12,000-ft drillship Noble Voyager has arrived in Mauritanian waters. Shell are understood to be using the rig to drill an exploration well at the Panna Cotta prospect on Block C-10. Noble Voyager has worked for Shell under various contracts since mid-2022, drilling offshore Sao Tome & Principe, Suriname, Mexico, and most recently Colombia. Under the contract awarded in May 2023, Shell will use the Noble Voyager to drill a deepwater well over a period of around 60 days and has the option to extend the contract’s duration by up to 24 months.
Saipem 12,000-ft semisubmersible Scarabeo 9 has arrived in Las Palmas in the Canary Islands, where the rig is expected to undergo in-yard maintenance. The rig recently moved from Angola. Scarabeo 9 was active offshore Angola from August 2021 into August 2023, working for Eni and then Eni/BP joint venture Azule Energy. Most recently, the rig is understood to have drilled the Lumpembe-1 exploration well for Azule Energy. Scarabeo 9 will be moving to Egyptian waters later this year for a contract with Burullus expected to keep the rig working into 2024 with options available into 2025.
Three rigs from ADNOC Drilling, the 400-ft Salamah and the 375-ft Zhaoshang Hailong 5 and Zhaoshang Hailong 6, have recently docked at Abu Dhabi Ports to undergo the commissioning process. The Zhaoshang Hailong 5 will be renamed “Ramhan” and the Zhaoshang Hailong 6 will be renamed “Yas”. These three rigs are among the five units that ADNOC Drilling acquired as part of its fast-tracked rig fleet expansion programme. The rigs have been awarded 10-year contracts and are expected to commence operations by the end of 2023. ADNOC’s acquisition timeline includes the Salamah rig in June 2022, followed by the Zhaoshang Hailong 5 and Zhaoshang Hailong 6 rigs in June 2023. Salamah is of a KFELS Super B Class design and Zhaoshang Hailong 5 and Zhaoshang Hailong 6 are of a Gusto MSC CJ46 jackup rig design.
Other News
Vantage Drilling plans to upgrade the 12,000-ft drillship Platinum Explorer with a six-ram BOP during an out-of-service period in early 2024. The rig will also undergo its SPS and other maintenance at this time. Platinum Explorer has been working for ONGC offshore India for the past several years and its contract has now been extended slightly into January 2024, after which the rig will go into the yard for its SPS, maintenance and BOP upgrade. Platinum Explorer is currently equipped with a five-ram BOP. The new $26 million BOP was acquired in 2016 and has been in storage since then as it is not a requirement for the rig’s contracts with ONGC.
Shell subsidiary BG International Limited has signed a farmout agreement with a subsidiary of Kuwait Foreign Petroleum Exploration Company (KUFPEC), giving KUFPEC a 40% interest in Nile Delta Block 3 (Northeast El-Amriya) in the Egyptian waters of the Mediterranean Sea. The agreement is subject to government and regulatory approvals. Shell will remain as the operator of Block 3. Shell acquired a 100% interest in the block from ExxonMobil in May 2022 and also holds Block 4 (North Sidi Gaber Concession) and Block 6 (North Al Fanar Concession) in the West Nile Delta Area. Shell began a three-well exploration drilling campaign on Blocks 3 and 4 in August 2023 with Stena Drilling’s 10,000-ft drillship, Stena Forth.
A tribunal has found in favour of shipbuilder Hanwha Ocean in arbitration proceedings involving subsidiaries of Northern Drilling Limited and the newbuild 7th generation drillships known as West Aquila (now Deepwater Aquila) and West Libra. Northern Drilling subsidiaries West Aquila Inc. and West Libra Inc. cancelled resale contracts with Daewoo Shipbuilding & Marine Engineering Co. Ltd (DSME now Hanwha Ocean Co. Ltd.) for the two newbuilds in August 2021 and October 2021 respectively. Northern Drilling cited delays in delivery. The tribunal has dismissed the claims of Northern Drilling’s subsidiaries, which were seeking awards for their claim of $90.0 million instalments paid on the two rigs along with interests and damages. Hanwha’s claims against the subsidiaries for losses arising from the terminations, interest, and costs will be determined at a future hearing. Northern Drilling stated that its subsidiaries are disappointed with the tribunal’s determination and are currently considering whether to appeal. Hanwha and another Northern Drilling subsidiary are also involved in arbitration proceedings over the 12,000-ft drillship West Cobalt, which was later bought by TPAO and renamed Abdulhamid Han. Northern Drilling does not currently own any drilling assets. The 12,000-ft West Aquila was acquired by Liquila Ventures in 2022 and has been renamed Deepwater Aquila. The rig, which is scheduled for delivery in late 2023, was fully acquired by Transocean in September when it bought out its Liquila Ventures partners. Transocean has secured a three-year contract for the rig with Petrobras. The 12,000-ft West Libra remains undelivered at Hanwha Ocean’s yard in South Korea. The rig is understood to be owned by Hanwha Ocean at this time but has attracted interest from other buyers.
Operator Equinor and partner Ithaca Energy have taken the final investment decision (FID) to progress Phase 1 of the Rosebank development on the UK Continental Shelf (UKCS), investing $3.8 billion. This comes following the granting of development and production consent for the development by the UK’s North Sea Transition Authority (NSTA). The consent has been given by the oil and gas regulator following the acceptance of the Environmental Statement. The Rosebank field is located around 130 kilometres northwest of Shetland in approximately 1,100 metres of water depth. Total recoverable resources are estimated at around 300 million barrels of oil, with Phase 1 targeting an estimated 245 million barrels of oil. The field will be developed with subsea wells tied back to a redeployed FPSO, with start-up planned in 2026-2027. The FPSO has been designed to be electrification-ready. Oil will be transported to refineries by shuttle tankers, while gas will be exported through the West of Shetland Pipeline system to mainland Scotland. Odfjell Drilling has already been awarded a rig contract, with an estimated value of $328 million including integrated services, modifications and options. The 10,000-ft Deepsea Atlantic semisub is scheduled to start a seven-well drilling campaign in the second quarter of 2025, and, in addition, four single-well options are included.
Following a ruling from the US Court of Appeals for the Fifth Circuit, the Bureau of Ocean Energy Management (BOEM) is postponing Gulf of Mexico Outer Continental Shelf Oil and Gas Lease Sale 261 from 27 September 2023 to no later than 8 November 2023. BOEM stated the order will allow it time for a more orderly lease sale process as it will now include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice’s whale distribution in the Gulf of Mexico. BOEM will also remove portions of a related stipulation meant to address potential impacts to Rice’s whale from the lease terms for the leases that may be issued as a result of Lease Sale 261. A revised Final Notice of Sale will be issued in the coming days, giving a new date for the lease sale.
Talos Energy and its Mexican subsidiary, Talos Mexico, have announced the closing of the sale of a 49.9% interest in Talos Mexico to Zamajal, a wholly-owned subsidiary of Grupo Carso, a company controlled by the family of the Mexican billionaire Carlos Slim. The sale was announced in late May 2023. As consideration for the sale, Talos received $74.85 million in cash at closing, with an additional $49.90 million due upon first production, for an aggregate price of $124.75 million. Talos Mexico, now owned 50.1% by Talos Energy and 49.9% by Carso, holds a 17.4% interest in the Zama field off Mexico. Talos will remain the controlling shareholder of Talos Mexico. In June 2023, Mexico’s Comisión Nacional de Hidrocarburos (CNH) approved the Zama Unit Development Plan. Talos is working with the Zama Unit’s Integrated Project Team to progress the front-end engineering and design and other workstreams required to reach a Final Investment Decision (FID). Talos will co-lead the planning, drilling, construction, and completion of all Zama wells and the planning, execution, and delivery of Zama’s offshore infrastructure. Talos President and Chief Executive Officer, Timothy S. Duncan, commented: “We expect that Talos’s strong operational track record combined with Carso’s critical local presence and global commercial reputation will enable us to further advance Zama toward FID and first production.”
The Norwegian Petroleum Directorate (NPD) has granted consent for the start-up of the Equinor-operated Breidablikk field in the North Sea. Equinor drilled the wells with the 10,000-ft Deepsea Aberdeen semisub, which has been working for the company since 1H 2022. Following the completion of the Breidablikk scope, the rig will move on to the Svalin field for a 174-day work scope added to the rig’s backlog in May 2023. The rig is firm with Equinor into 2025 with options thereafter. Breidablikk is an oil field situated ten kilometres northeast of the Grane field, west of Haugesund. Equinor is the operator, while Vår Energi, ConocoPhillips, and Petoro are licensees. The field is a subsea development with four subsea templates, each with six well slots. The project contains around 30 million standard cubic metres of recoverable oil (approx. 190 million barrels of oil) and total investments are around NOK 19 billion. The plan for development and operation (PDO) was approved in June 2021. Production is expected to start in October 2023.
Petronas has acquired a 40% interest in Block 20 in the Kwanza Basin offshore Angola from TotalEnergies for $400 million. TotalEnergies retains the operatorship and a 40% interest in Block 20 while Sonangol has a 20% interest Block 20 contains the Cameia and Golfinho oil discoveries. These discoveries are planned to be developed through a system of subsea wells connected to an FPSO with an oil production capacity of 70,000 barrels per day.
