Soumya Mutsuddi, Esgian

This week Valaris provided an update on its floaters currently being reactivated for new engagements, while Transocean's newbuild drillship Deepwater Atlas commenced sea trials. Meanwhile, Stena IceMAX arrived offshore Israel to start a campaign for Energean, and Northern Ocean announced new names for its Odfjell-managed semisubs.

Contracts 

Valaris has provided an update on its floaters that are currently undergoing reactivation. 6th gen semisub Valaris DPS-1 is being reactivated in Johor, Malaysia, and is on track to begin a charter with Woodside off Australia starting this month. The contract is expected to keep the rig busy until May 2024. 7th gen. drillship Valaris DS-16 is being is being reactivated in Pascagoula, Mississippi, USA, with the rig scheduled to commence a two-year charter with Oxy starting in May 2022. 6th gen. drillship Valaris DS-4 and 7th gen. drillship Valaris DS-9 are being reactivated in Las Palmas, Canary Islands. Valaris DS-4 will then transit to South America to begin a charter with Petrobras off Brazil, with the charter set to run from June 2022 until December 2023. Valaris DS-9 will move to Angola for its next engagement with ExxonMobil, scheduled to run between June 2022 to May 2024.

7th gen drillship Vela has been awarded a new contract by BHP involving operations in the US Gulf of Mexico during September 2022 and December 2022. The rig is presently managed by Seadrill and is working for Equinor in the US Gulf of Mexico, with the contract ending in May 2022. Following expiration of the contract, the management of the rig will be taken over by Diamond Offshore. Diamond Offshore also announced contract extensions for some of its floaters, with mid-water semisubs Ocean Patriot and Ocean Endeavor set to remain on their current deals with Apache and Shell until Q4 2022 and Q4 2023, respectively. Also, semisub Ocean Onyx is now set to remain working with Beach Energy offshore Australia until July this year.

Market sources indicate that Foresight Drilling has received an extension for its jackup Vivekanand 3 from ADNOC. According to sources, the operator has declared a two-year option on the current contract for the rig offshore the UAE, which once finalised will now extend until May 2024.

Sanare has chartered jackup Enterprise 264 for drilling one well over approx. 80-85 days starting in direct continuation with the rig’s upcoming charter with Byron Energy. Byron’s two-well programme is set to begin in early April and will take place in South Marsh Island Block 58, with operations expected to run over 90 days. This latest backlog should keep the rig working into mid-to-late September 2022.

Drilling and discoveries

JV partner Longboat Energy has announced commencement of drilling at the Equinor operated Kveikje exploration well 35/10-8S in licence PL293B, offshore Norway. Drilling of the well is being undertaken by the 6th gen deepwater and harsh environment semisub Deepsea Stavanger and is expected to take up to four weeks. Longboat added that a further announcement will be made when drilling operations have been completed. Longboat holds a 10% non-operating interest in the well.

Vantage Drilling managed 6th gen. drillship Capella has completed an engagement for PTTEP offshore Malaysia. On its next engagement, the rig will engage in exploration drilling for Harbour Energy off Indonesia. The contract is expected to commence later this month and involves two wells, with one well subcontracted to Repsol, in addition to options for two additional wells.

6th gen drillship Stena IceMAX has arrived offshore Israel to commence operations for Energean. The firm scope for the contract involves drilling of three wells, with options included for two additional wells. Market sources indicate that drilling of the first well in the campaign, Athena-1, is likely to begin this week. 

Vaalco has completed drilling development well Etame 8H-ST, which came online in February 2022, and has now commenced drilling of development well Avouma 3H-ST1. The operator plans to drill additional two wells as part of the 2021/2022 drilling campaign. Last year, the company contracted the Borr Drilling jackup Norve to undertake the drilling of the four wells.

The Norwegian Petroleum Directorate informed that Equinor has completed the drilling of wildcat well 34/4-18 S in production licence 057 (part of the Snorre unit) offshore Norway. The well was found to be dry, with no traces of hydrocarbons and has been permanently plugged and abandoned. Drilling was undertaken using the 6th gen deepwater and harsh environment semisub Deepsea Stavanger, which is moving on to drill wildcat well 35/10-8 S in Equinor operated production licence 293 B in the North Sea.

JV partner Carnarvon energy informed that jackup Noble Tom Prosser has now returned to full manning levels and is preparing to re-commence drilling and logging operations at the Pavo-1 well in Santos operated WA-438-P exploration permit offshore Australia. This follows an earlier announcement by the company in late February 2022 that the rig was being prepared for down-manning due to potential cyclone activity. 

Demand

Empyrean Energy has updated that a well site survey required over the Jade Prospect drilling location offshore China has been successfully completed, which would enable the prompt lodging of the final permit application required to drill the Jade Prospect. All other drilling permits required have been obtained and finalised. Empyrean added that it is now in further discussions to finalise drilling rig availability and an anticipated spud date for the Jade Prospect well. Early discussions with both COSL and CNOOC regarding a drilling slot using the 4th gen semisub Nan Hai Jiu Hao (also known as Nanhai 9 or NH9), which is currently drilling a well for CNOOC in the region, have been positive. Empyrean anticipates that the rig will become available by the end of March if the current well does not encounter testable hydrocarbons or approximately 2 weeks later if a testing program is required, and that the Jade well will be spud in early April or mid-April depending on results of the current CNOOC well. Empyrean is the operator of Block 29/11 offshore China and has 100% working interest during the exploration phase. In the event of a commercial discovery, its partner, CNOOC, may assume a 51% participating interest in the development and production phase. 

Emperor Energy has informed that it has engaged well management company, AGR, to progress with the preparation and submission of the necessary applications to NOPSEMA for approval to drill the Judith-2 appraisal well offshore Australia. The scope of work includes preparation of an environmental plan for drilling the well, preparation of a plan to accommodate the use of a jackup, tracking of rig availability and rig contracting, among others. The application to NOPSEMA is planned for submission by August 2022 with approval expected by year end. Drilling of the well is planned in 2023 and Emperor said that it will provide ongoing updates on progress with preparation of the application for approval. The Judith-2 appraisal well is planned for the Judith gas field in the company’s 100% owned Vic/P47 permit in the Gippsland Basin. 

Mobilisation

6th gen. harsh environment semisub Transocean Norge is underway in the North Sea to commence operations for ConocoPhillips offshore Norway shortly. The contract is expected to have a firm duration of about 200 days and two options attached.

Jackup Valaris Viking is underway in the North Sea to commence operations for Sval Energi on the Oda field offshore Norway. The contract involves the drilling of one development well. 

Rig Sales

Market sources indicate that due to limited regional activity, future options are being considered for the 5th gen. mid-water semisub Maersk Explorer, including the possibility of scrapping. However, nothing has been confirmed as of now. The rig is currently stacked off Azerbaijan and has not worked since the beginning of 2021, when it concluded its last engagement for BP.

Newbuild

Transocean informed that the newbuild Deepwater Atlas is undergoing sea trials in the South China Sea. The drillship will be fitted with a 20,000 psi BOP, and upon delivery will commence its maiden contract with Beacon in the US Gulf of Mexico in Q4 2022. 

Other News

Northern Ocean announced that it would change the name of its two 6th gen. winterized semisubs—West Mira and West Bollsta. While the West Mira will be renamed to Deepsea Mira, the West Bollsta will be known as Deepsea Bollsta. The name change follows an agreement signed in December 2021 under which Odfjell Drilling took over the management of the two rigs from Seadrill. Northern Ocean said that ‘the name change reflects the close relationship with our new partner and a reintroduction of the fleet under new management’. 

Seven companies have submitted bids for acreage on offer in the 2nd Timor-Leste licencing round, according to regulator Autoridade Nacional do Petróleo e Minerais (ANPM). Prominent names among the applicants include Eni and Santos. Under the licencing round, 18 new blocks are on offer comprising seven new onshore permits and 11 offshore licences. The bid deadline was 4th March and ANPM will announce the winners on 15th April 2022.

Following discussions between senior officials of the two companies, Libya’s National Oil Corporation announced that BP has agreed to resume operations in Libya on its onshore exploration plots in the Ghadames Basin and its offshore blocks in the Sirte Basin. The strategy of the National Corporation for the development of onshore and offshore gas exploration was also discussed with the aim of raising gas production rates to respond to the increased demand for gas in the global market.

Pandion Energy has agreed to buy ONE-Dyas Norge AS for an undisclosed amount. The deal includes a 10% share of the Wintershall operated Nova field in the North Sea off Norway, and a total of 11 exploration licenses. Pandion Energy CEO pointed out that the company has long indicated plans for further expansion on the Norwegian Continental Shelf and is still actively searching for and evaluating additional opportunities to further grow its portfolio.

Canada's Environment Minister Steven Guilbeault again delayed a decision on Equinor's Bay du Nord project, this time until 13 April 2022, noting more time is needed to determine whether the project is likely to cause "significant adverse environmental effects". Equinor has not yet announced a final investment decision for the project.

Noble and Maersk Drilling have announced the board members for the combined company, to take effect upon closing, which is expected by mid-year.

Frontera Energy and CGX Energy, joint venture partners in the Petroleum Prospecting License for the Corentyne block offshore Guyana, have entered into a financing agreement for a $35 million loan that will enable CGX to continue to finance part of its share of costs related to the Corentyne Block, the Berbice Deepwater Port, and other budgeted costs as agreed to with Frontera. The JV partners will look to drill their second commitment well offshore Guyana, called  Wei-1, during the second half of 2022.

Eco (Atlantic) Oil & Gas Ltd. announced that all conditions have been completed in order to close Eco's acquisition of Azinam, save and accept for receipt of the final approval of the TSX Venture Exchange. As disclosed in the company's announcement of February 8, 2022, the acquisition will result in the issuance to Azinam of 40,170,474 common shares in the capital of Eco, providing Azinam with 16.5% of Eco's share capital as enlarged by such issue, providing for a cashless acquisition to become the sole owner of Azinam's entire African portfolio. Earlier this month, Eco announced that it has contracted the 6th gen. harsh environment semisub Island Innovator for drilling the Gazania-1 well in Block 2B offshore South Africa. Gil Holzman Co-Founder and CEO of Eco Atlantic commented: "We are pleased to have completed this acquisition, subject to final approval to issue the shares. We now own and operate a number of highly prospective licences in three of the most exciting regions for exploration in the world: Guyana, Namibia and South Africa. We continue to make strong progress towards the upcoming drilling of the Gazania-1 well, offshore South Africa, and following the signing of the rig contract earlier in the month we anticipate drilling to commence in late Q3 2022.  We look forward to making further updates on our strategic acreage in due course."

KeyFacts Energy Industry Directory: Esgian