This week's highlights include drilling activities in Egypt, Norway, and Namibia, as well as a new jackup contract in Southeast Asia.
In case you missed it, you can access our previous Rig Market Roundup here.
Contracts
Well plug and abandonment specialists Well-Safe Solutions has agreed a global master agreement with bp lasting until at least September 2026, with two one-year contract extension options available. The agreement will see the well decommissioning specialists provide bp with project management, well engineering, engineering design, and well decommissioning services. This comes following Well-Safe’s work with bp on decommissioning wells in the North Sea’s Kate field earlier this year. Matt Jenkins, Chief Operating Officer at Well-Safe Solutions, said the agreement will enable the company to deliver bespoke solutions tailored to bp’s well stock, including the possibility of utilising the 1,500-ft semisub Well-Safe Guardian, the 400-ft jackup Well-Safe Protector or the 1,200-ft semisub Well-Safe Defender plug and abandonment rigs. All three Well-Safe rigs are currently working in the North Sea. The company has also recently secured additional work for the Well-Safe Defender semisub rig.
ADES is expanding into Southeast Asia with the award of a long-term contract with Pertamina Drilling Services Indonesia (PDSI) to operate its existing jackup rig Emerald Driller in the Java Sea for Pertamina in Region 2. This jackup contract in Indonesia is extending ADES’ footprint into its eighth country of operations. The contract comprises a three-year firm period and a two-year option and has a total value in excess of SAR 803 million (around $214 million). The work is expected to begin during the second half of 2024, utilising the existing jackup drilling unit, Emerald Driller. The 375-ft rig will move to Indonesia immediately after concluding its current contract in Qatar. It is under contract with TotalEnergies, which is scheduled to end in May 2024.
Drilling Activity and Discoveries
Abu Qir Petroleum will use Egyptian Drilling 375-ft jackup El Qaher I to drill infill well (NAQ-PII#2) on the Abu Qir licence offshore Egypt following the completion of its current development drilling project. El Qaher I has been carrying out development drilling at the North El Amriya and North Idku (NEA/NI) development project offshore Egypt, where work is expected to be completed by year-end 2023. The PY#1 well finished drilling in September 2023 and has been suspended ahead of first gas. The NI#1 well spudded in September 2023 and is expected to complete in December 2023. Both wells are expected to be on stream by the end of the year. The first gas from the project was reported in the first quarter of 2023. The Abu Qir and NEA/NI concessions are owned by Energean and operated by joint venture companies under the management of Abu Qir Petroleum.
Norway’s Petroleum Safety Authority (PSA) has given Equinor consent for drilling an appraisal well in the North Sea offshore Norway. The well 35/10-11 S is located in production license 827 SB, which is operated by Equinor with DNO Norge participating as a partner. The well will be drilled with Odfjell Drilling’s 10,000-ft semisub Deepsea Stavanger. This is the same rig that drilled the wildcat well 35/10-9 in early 2023, targeting the Heisenberg prospect, and discovered volumes estimated at between 24 and 84 million barrels of oil equivalent, with slightly more oil than gas. The discovery was deemed commercially interesting, partly because of the possibility of using existing infrastructure connected to the Troll B platform. However, to get a more precise estimate of the size before concluding whether the volumes can be recovered, an appraisal well is needed.
Equinor is applying for the drilling of an exploration well in the Barents Sea offshore Norway. The Norwegian Environment Agency (Miljødirektoratet) has received an application from Equinor for permission under the Pollution Act to drill exploratory well 7220/2-2 Snøras in the Johan Castberg area in the Barents Sea. The position is about 33 km northeast of where the Johan Castberg facility is planned to be located. The well is located in the Equinor-operated production licence 1080 in partnership with Vår Energi and Petoro. Drilling is planned to be carried out with the 1,640-ft semisub Transocean Enabler with a start date in March 2024 at the earliest and a duration of 32 days upon discovery. The expected oil type is Skrugard oil. Equinor has also recently applied for permission to drill the 7324/7-4 Wisting Appraisal and 7324/7-U-2 S Wisting Appraisal pilot holes in the Barents Sea. The operations will be carried out with Odfjell Drilling’s Deepsea Stavanger semisub.
Galp Energia has spudded the Mopane exploration well on PEL 83 in the Orange Basin offshore Namibia with Odfjell Drilling-managed 10,000-ft semisubmersible Hercules. Mopane is a sandstone target. Galp is carrying out a two-well campaign in Namibia with Hercules, plus dynamic testing. This is expected to take around 115 days. Hercules arrived in Namibia in early November 2023 and spudded Mopane mid-month. PEL 83 covers Blocks 2812A/2814B in the northern region of the Orange Basin. Galp Energia is the operator with an 80% interest with a 10% interest held by Inter Oil and a 10% interest held by national oil company NAMCOR.
Shell Egypt has completed the drilling of the first well in its three-well exploration campaign, Mina West, located in the North East El-Amriya block, in the Mediterranean Sea. Drilling activities took place at a water depth of around 250 metres below sea level in the offshore Nile Delta, with primary data confirming the presence of gas-bearing reservoir. Further evaluation of the acquired data is required to determine the size and recoverable potential of the discovery. Shell has contracted Stena Drilling’s 10,000-ft drillship, Stena Forth, to carry out the drilling campaign. The rig has been working for Shell in Egypt since August 2023 and is firm into Q2 2024. Khaled Kacem, Vice President and Country Chair of Shell Egypt, said that Shell, together with its partners, will continue to work towards reaching the development phase of the block. In September this year, Shell signed a farm-out agreement (FOA) with Kuwait Foreign Petroleum Exploration Company (KUFPEC) under which KUFPEC acquired a 40% stake in the North East El-Amriya block, with Shell holding the remaining 60% stake of the partner’s share with the Egyptian Natural Gas Holding Company (EGAS).
Demand
Horizon Energy plans to drill its Dabinett prospect in the UK’s Southern North Sea in early 2025. Horizon Energy has been approved by NSTA as the licence operator of Licence P2557 in the Mid-North Sea High area of the Southern North Sea. The licence contains the Dabinett prospect. On 1 December, the licence will transition to Phase C with a 3-year term. During Phase C, an initial exploration well will be drilled on the Dabinett prospect. Horizon is also finalising the acquisition of a 12.5% interest in the licence not currently held by the company and its affiliates. When completed, the licence interest will be held entirely by Horizon and an affiliated company. The Dabinett prospect contains mean prospective resources for the Hauptdolomit as independently evaluated by ERCE as 663 BCF of gas or 153 MMB of oil. The Carboniferous secondary targets increase the mean prospective resources to approximately 1 TCF of gas or 200 MMB of oil. Horizon is planning to drill the well in early 2025. Horizon is open to third-party participation through either a farm-in transaction or equity investment.
Mobilisation/Rig Moves
The Valaris-owned heavy-duty harsh-environment jackup, the Valaris 123, has completed its contract with ONE-Dyas in the Dutch sector of the North Sea and moved to Dundee, Scotland. The contract with ONE-Dyas started around mid-March and ended in November. Following the completion of the contract, the 400-ft rig moved to Dundee, accompanied by the Atlantic Kestrel vessel. The unit is scheduled to undergo a maintenance period of about 60 days in Q1 2024. After that, it’s available until Q4 2024, when it’s expected to start a six-well CCS contract with TAQA, also in the Dutch North Sea. The contract includes options for up to 10 wells with an estimated total duration of 300 days, which could keep it busy into Q1 2026.
The Foresight-owned 350-ft jackup Vivekanand 1 will perform its contract preparation in Mumbai, India. The Vivekanand 1 rig completed its previous campaign with ONGC in India in mid-November 2023, and it will now perform contract preparation for a new, three-year campaign with the same operator. This contract was awarded under Category I awards in Q4 2022. It is expected to start by Q1 2024, keeping the rig busy until Q4 2026.
Other News
Following an order issued by the United States Court of Appeals for the Fifth Circuit on 14 November 2023, the Bureau of Ocean Energy Management (BOEM) has scheduled US Gulf of Mexico Oil And Gas Lease Sale 261 for 20 December 2023, delayed from 8 November 2023. The lease sale was originally scheduled for 27 September 2023 and then 8 November 2023 in response to judicial orders. In early November, the BOEM stated that as a result of an 26 October 2023 order from the court, it was postponing Lease Sale 261 as it could not be certain of which areas or stipulations may be included in the sale notice. A Final Notice of Sale will be published in the Federal Register on 20 November 2023. Under directions from the court, the BOEM will include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice’s whale population in the Gulf of Mexico. BOEM will also remove portions of a related stipulation meant to address those potential impacts from the lease terms for any leases that may result from Lease Sale 261.
Orlen Group company PGNiG Upstream Norway has entered into an agreement to acquire Kuwait Foreign Petroleum Exploration Company’s subsidiary KUFPEC Norway. The agreement covers the acquisition of all shares and assets for a contractual price set at $445 million as of 1 January 2023. The transaction is scheduled to be finalized by the end of the year, subject to approval by Norwegian authorities. The acquisition will expand PGNIG Upstream Norway’s holding in the producing fields of Gina Krog, Sleipner Vest, Sleipner Ost, Gungne and Utgard. Gas produced from these fields will be transported to Poland via the Baltic Pipe pipeline. The company will also gain an interest in the Eirin gas field, which is scheduled for development via a tieback to Gina Krog infrastructure. Upon completion of the KUFPEC acquisition, the Orlen Group will hold 94 licenses on the Norwegian Continental Shelf. In May 2023, Orlen integrated its Norwegian operations by consolidating the production assets of PGNiG Upstream Norway and LOTOS Exploration & Production Norge, which it acquired in 2022. Also this year, PGNiG purchased interests in the Sabina and Adriana fields offshore Norway. The company has been pursuing a program to increase its hydrocarbon output and in June 2023, the company and its partners received approval for the development of eight fields.
KCA Deutag has been awarded a contract to carry out a project to electrify Equinor’s 460-ft Cat J jackup rig, Askepott, in Norway. The project will be delivered by KCA Deutag’s Kenera business unit. The electrification project will make the Askepott rig the first in Equinor’s portfolio to be powered from onshore when it is completed in Q4 2024. Askepott will receive power from high-voltage cabling via the Martin Linge A platform, which is already supplied with power from the shore through the world’s longest alternating current cable and is located 42 kilometres west of the Oseberg field in Norway. The electrification of the Askepott rig in the field will enable energy-efficient drilling operations and provide significant decreases in greenhouse gas (GHG) emissions. Based on historic records and predicted calculations, it is anticipated the project will result in a reduction of twenty thousand tons of carbon dioxide (CO2) per year when compared to running with traditional diesel generators. As a key part of the project, Kenera will convert the existing mud treatment room on Askepott to an electrical power room and install transformers, Variable Frequency Drives (VFDs), and high-voltage switch boards certified to DNV classification requirements. This project is the next step in previous Kenera campaigns to reduce CO2 emissions, which have included the energy optimisation of both of Equinor’s Cat J rigs, the Askepott and Askeladden. These projects deployed CO2 and Nitrogen Oxide (NOx) reduction technologies and resulted in the elimination of more than 85% of NOx emissions.
Ping Petroleum UK has completed the farm-in to UK Petroleum Licence P2451, which contains the Fyne field, located near its Anasuria FPSO unit in the central North Sea. Following the agreements made earlier this year, the farm-in provides Ping with 42.5% of the licence area, and partners Hibiscus Petroleum with 42.5%, and Rapid Oil (the current field owner) with 15%. The Fyne field has an estimated STOIIP (stock tank oil initially in place) of approximately 75MMbbl equivalent. It is located in Block 21/28b, at a water depth of about 90m, approximately 16km from the Anasuria FPSO. The Anasuria Cluster is a portfolio of producing, appraisal, and exploration licences in the UK North Sea, located 175km east of Aberdeen. It also incorporates the Teal, Teal South, Guillemot A (Ping UK has a 50% interest in each field) and Cook field (Ping has a 19.3% interest). All of these fields share the Anasuria FPSO host platform and lie in a water depth of 94m. Ping and Hibiscus each have a 50% share of the Anasuria FPSO. A number of opportunities exist within the licence areas. The projects identified provide field re-development opportunities and development of existing discoveries. Tie-back development to existing or potential hub will continue to be a focus for Ping in the next two to five years.
Serica Energy has executed agreements for the acquisition of 30% non-operated interests in the P2498 and P2170 licences (together the Greater Buchan Area (GBA)) in the UK North Sea from Jersey Oil & Gas. The transaction is structured as a farm-in, with modest up-front and contingent consideration payments, and a carry of pre-Financial Investment Decision (FID) and development costs. The completion is expected to occur early in 2024 and the partners will be Serica Energy (30%), NEO Energy (50% and operator), and JOG (20%). Serica will have the option of participating in the re-development of the Buchan field and other potential developments in the GBA. The GBA encompasses several oil and gas accumulations some 150 km north-east of Aberdeen, in the Outer Moray Firth. The Concept Select Report submitted to the NSTA for the re-development of Buchan is based on a new production hub located at the Buchan field using the FPSO vessel currently operating on the UK Western Isles fields and planned to come off-station in the second half of 2024. The acquisition of the FPSO by NEO was announced on 17 November 2023. A phased development involves the re-development of the Buchan field in Phase 1 and the possible development of the J2 and Verbier discoveries in Phase 2. Mid-case contingent resources from the Buchan field alone are estimated to be in region of 70 million barrels of oil equivalent, making it the third largest pre-development field in the UKCS. There are other discoveries and prospects which provide tie-back opportunities. The NSTA has issued a no objection letter following the submission of the Concept Select Report. A proposed Field Development Plan (FDP) is expected to be submitted to the NSTA shortly, with approval of the FDP potentially in the second half of 2024. Subject to project sanction and regulatory approval, the target for first production is late 2026.
United Oil & Gas has reported that its potential partner for the drilling of an exploration well on the Walton Morant Licence off Jamaica has given up on participation in the licence. Further to an announcement earlier in November, United has now been informed by the counterparty that had been identified as a preferred potential partner, that they no longer wish to pursue further discussions in relation to participation in the Walton Morant Licence. United will now focus on the recent positive interest that has been shown by other parties in potentially participating in this high-impact exploration opportunity. The board believes that the renewed interest in exploration opportunities worldwide, which is being driven by the strong future demand for oil and gas, will support the farmout efforts. The company continues to engage with the Jamaican authorities to secure an extension to the current licence period, which expires at the end of January 2024, with a negotiated work programme that comprises additional technical work that would further de-risk the licence prior to the drilling of the exploration well.
The DNV-classed rig, the 10,000-ft Transocean Norge, has become the first semisubmersible rig to be awarded DNV’s Abate (Power+) notation following upgrades designed to lower its greenhouse emissions during operations. According to DNV, the Abate (Power+) notation is designed to reflect the best industry practises in greenhouse gas abatement for offshore units.The notation represents emission reduction targets and also a comprehensive energy and emission management system aligned with ISO 50001 standards. It emphasises rigorous monitoring of energy consumption and the implementation of both operational and technical strategies to notably reduce emissions. Transocean implemented several key strategies to ensure the rig meets these standards, including comprehensive monitoring of energy consumption, optimisation of operational energy, use of closed bus ties to minimise the number of idle engines (including the DYNPOS(AUTRO-CBT) class notation), and variable frequency drives in rotating machinery to optimally control the power for large rotating machinery. The rig is currently working in Norway under a long-term contract with Wintershall Dea and OMV, which will keep it busy through the first half of 2027.
Image credit: Stena Drilling
