Soumya Mutsuddi, Esgian

This week Maersk Drilling announced award of a P&A contract through rig sharing agreement, and Equinor announced a new discovery off Norway. Also, Noble Corp and Maersk Drilling announced plans to divest some rigs to facilitate regulatory clearance for their merger in UK.

Contracts 

Maersk Drilling announced that harsh environment jackup Maersk Resolute has been awarded a contract involving the P&A of 31 wells in the Dutch North Sea. The contract would be executed through a rig sharing agreement between TotalEnergies and Petrogas and includes P&A of 11 wells with TotalEnergies and 20 wells with Petrogas. Contract commencement is expected in Q2/Q3 2022, in direct continuation of the rig’s current contract. The estimated duration is 575 days, and the total firm contract value is approximately $43 million, excluding potential performance bonuses. The contracts include options to add additional work scopes with a total estimated duration of 228 days. The jackup is currently working for One Dyas in the Dutch North Sea.

PV Drilling announced new contract awards for its jackups, PV Drilling VI and PV Drilling II. 2015-built PV Drilling VI will undertake a drilling campaign at Premier Oil’s Block 12W in Nam Con Son basin offshore Vietnam. Contract commencement is from July 2022 following completion of the rig’s current drilling campaign with Eni. The workscope involves drilling of 2 firm wells, with 1 optional well included in the contract. PV Drilling also signed a contract with Vietsovpetro under which the 2009-built jackup PV Drilling II will drill 5 wells at Block 09-1 off Vietnam, with the rig having commenced drilling in mid-March 2022. Following conclusion of the drilling campaign for Vietsovpetro, PV Drilling II is scheduled to mobilise to Indonesia to undertake a new campaign in Block A, Natuna Sea from beginning of Q3 2022. Market sources indicate that the client is Harbour Energy, the operator for Block A.

Drilling and discoveries

Equinor announced a new oil and gas discovery in the company-operated production licence 293 B off Norway, close to the Troll and Fram area. This follows the conclusion of drilling wildcat well 35/10-8 S in the licence. Equinor said that based on preliminary estimates the size of the discovery is between 4 and 8 million standard cubic metres of recoverable oil equivalent, or 25-50 million barrels of recoverable oil equivalent. Equinor also informed that the discovery is temporarily called Kveikje, and is the sixth discovery in this area since the autumn of 2019. The well was drilled by the 6th gen harsh environment semisub Deepsea Stavanger. The licence owners of 293 B are Equinor (51%), DNO (29%), Idemitsu (10%) and Longboat Energy (10%).

Equinor has commenced drilling the Cambozola exploration well (34/9-1) in the Norwegian North Sea using the 6th gen. deepwater and harsh-environment semisub Deepsea Stavanger. This well follows the successful Kveikje discovery announced earlier this month. The drilling programme at Cambozola, which is one of the largest gas prospects to be drilled off Norway this year, is expected to take up to 14 weeks. In the event of a discovery at Cambozola, there will be follow-up prospectivity on licences PL1049, PL1049B and PL1049C.

JV partner Finder Energy updated that all regulatory and environmental approvals have been secured and preparations are nearing completion for the drilling of the Kanga-1 well in Block WA-412-P off Australia. The well will be drilled using the semisub Ocean Apex, currently on stand-by, with the rig handover expected on or about 1st May 2022. Drilling is expected to commence in early May and the Kanga-1 well will take approximately 30 days to reach a total depth of 3,300m. SapuraOMV is the JV operator and is partnered by Finder Energy and Fugro Exploration. Finder expects that the final well results will be announced in June. Ocean Apex’s next scheduled engagement is with Woodside for a P&A job off Australia. 

Empyrean Energy announced that semisub Nan Hai Jiu Hao (NH9) spudded the LH 17-2-1 well on the company-operated Jade prospect in Block 29/11 offshore China on 10th April. Empyrean informed that if an oil pay zone is confirmed then the plan is to carry out flow testing operations on the oil pay zones. Empyrean has 100% working interest in Block 29/11 during the exploration phase, and in the event of a commercial discovery, its partner CNOOC may assume a 51% participating interest in the development and production phase.

Vaalco announced the 'successful' drilling of the Avouma 3H-ST development well that was drilled from the Avouma platform in the Etame field, offshore Gabon. The drilling confirms extension of Avouma reservoir and is forecasted to increase the overall recovery from the field, potentially allowing for additional wells at Avouma. Following the completion, the drilling program will continue with the spudding of the ETBSM-1HB ST2 development well from the Avouma platform.

Demand

ExxonMobil plans to drill additional wells offshore Guyana, having submitted two applications for a 12 well exploration and appraisal campaign in the Canje and Kaieteur Blocks. Both blocks are located in ultra-deepwater and will be drilled by a drillship. In the Canje Block, the drilling operations are expected to commence in Q4 2022 and is expected to last until Q1 2025. So far, ExxonMobil and partners have drilled 3 wells in the Block. Last year, Bulletwood-1 was drilled by Stena Carron and encountered non-commercial hydrocarbons. This was later followed up with the second well, Jabillo-1, which was drilled by Stena DrillMax and the well showed no evidence of commercial hydrocarbons. A third well was drilled in late 2021, Sapote-1, and this well also failed to discover commercial hydrocarbons. ExxonMobil (35% WI) is the operator in Canje Block and is partnered by TotalEnergies (35% WI), Eco Atlantic (17.5% WI) and Mid-Atlantic O&G (12.5% WI). In the Kaieteur Block, drilling operations are also expected to commence in Q4 2022 and the campaign is expected to last until Q1 2027. The Block has seen less drilling operations but the first well, Tanager-1, was drilled in 2020. A discovery was made but was considered non-commercial as a standalone development. ExxonMobil (35% WI) is the operator in the Kaieteur Block with partners Ratio Petroleum (25% WI), Cataleya Energy (20% WI) and Hess Corp. (20%).

CNOOC announced that it has commenced production from the Weizhou12-8E oilfield, located in Beibu Gulf in the South China Sea. CNOOC said that a total of 7 development wells are planned for the project, including 6 oil production wells and 1 production water reinjection well. The project is expected to reach its average daily production of approximately 4,700 barrels of crude oil during 2022, with peak production of approximately 10,000 barrels of crude oil per day. JV partner Horizon Oil informed that drilling of the five remaining production wells is expected over the next 3-4 months. Drilling is being undertaken by the COSL-owned jackup COSLStrike. JV partners in the project are CNOOC Ltd (51%), Horizon Oil (26.95%), Roc Oil (19.6%), and Oil Australia (2.45%).

Argos Resources announced that the Government of Falkland Islands has extended the second term of the Company's PL001 licence from 1st May 2022 to 31st December 2022, with no additional work commitments. Argos did not comment on any future plans relating to the licence.

Mobilisation

Ocyan semisub Norbe VI is currently in the Port of Acu where the rig is undergoing repairs and maintenance before mobilising to the Wahoo and Frade fields in the Campos Basin, offshore Brazil. The semisub was contracted by PetroRio last year on a 500-days contract with an option for an additional 350 days.

Rig Sales

Noble and Maersk Drilling advised that discussions with the UK Competition and Markets Authority (CMA) remain ongoing in relation to their proposed merger, with the CMA expected to publish its phase 1 decision on 22 April 2022. Noble and Maersk have indicated that they expect it will be necessary to divest certain North Sea jackups in order to receive conditional antitrust clearance in phase 1 from the CMA. The set of rigs - referred to as Remedy Rigs - are expected to comprise Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and a CJ-70 design rig, which the companies believe will likely be Maersk Innovator, although they have indicated it is possible that Noble Lloyd Noble could be required to meet the clearance. Noble and Maersk have begun considering their options for divesting the Remedy Rigs.

Other News

Noble and Maersk Drilling advised that their proposed merger has been unconditionally approved by the competition authorities in Brazil, Norway, and the Republic of Trinidad and Tobago. The only outstanding clearances are in Angola and the UK. Noble and Maersk anticipate that the Angolan authority will unconditionally approve the transaction in April 2022. For obtaining clearance in the UK, the companies expect that it will be necessary to divest certain jackups currently located in the North Sea to obtain conditional antitrust clearance from the UK Competition and Markets Authority (CMA). As such, the companies have started to examine different options to divest these rigs. The two contractors note that this does not change the financial and strategic rationale behind the merger plan, and that they do not intend to change the exchange ratio agreed between them for the transaction. The duration and outcome of the CMA review remains uncertain. If conditional phase 1 clearance is granted, then Noble and Maersk expect the merger closing will take place in mid-2022.

Brazilian oil regulator ANP announced the award of 59 exploration blocks across six basins under the 3rd Cycle of the Open Acreage in the Concession Model. The auctions totaled R$422 million ($90 million) in signature bonus and will generate over R$400 million ($85 million) in investments in the exploration phase, as per ANP. The blocks were awarded to a total of 13 companies and are spread across six states—Rio Grande do Norte, Alagoas, Bahia, Espírito Santo, Santa Catarina, and Paraná. Shell was granted six blocks in the Santos Basin in partnership with Ecopetrol, while TotalEnergies won two areas in the same basin. Brazilian oil and gas company 3R Petroleum received six awards in the Potiguar Basin.

KeyFacts Energy Industry Directory: Esgian

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