Soumya Mutsuddi, Esgian

This week Borr Drilling signed agreement to sell three under-construction jackups, and Transocean received delivery of a newbuild ultra-deepwater drillship. Meanwhile, Maersk Drilling secured a one-well exploration drilling job off UK from Shell.

Contracts

Maersk Drilling secured a contract from Shell involving drilling of the Pensacola exploration well (Licence P2252) in the UK North Sea by the harsh-environment jackup Maersk Resilient. The contract duration is approx. two months and is expected to commence in direct continuation of the rig’s current work with NAM off the Netherlands. Licence partner Deltic Energy informed that drilling is scheduled to commence in the second half of September with seabed operations for placing of the rig due to commence towards the end of July.

Ocean Oilfield Drilling along with partner Dhabi Drilling announced a contract extension received for jackup B152 in the Middle East. The extension involves two years of firm work and one year of option with ADNOC and Abu Dhabi Oil Co. Ltd. (ADOC), which could potentially see the rig busy until Q4 2025. The rig has been working with ADNOC/ADOC since 2015.

Drilling and discoveries

Equinor received regulatory permit for drilling wildcat well 6607/12-5 in its operated licence 943 off Norway. Drilling is planned to be undertaken by harsh-environment semisub Deepsea Stavanger during August 2022. The rig’s firm work with the operator runs into Q1 2023. 

Equinor received regulatory consent for use of harsh-environment semisub Transocean Equinox for well intervention on its operated Martin Linge field off Norway. The rig is firmly committed to the operator until end 2022.

Aker BP received regulatory consent for use of harsh-environment jackup Maersk Integrator for well intervention and living quarters on its operated Valhall Flanke Nord field off Norway. The rig’s firm commitment with the operator runs into Q3 2027.

ConocoPhillips received exploration drilling permit for wildcat well 25/7-10 in the company-operated licence 782 S off Norway. Drilling will be undertaken by the harsh-environment semisub Transocean Norge during August 2022. The rig’s firm work with the operator runs into Q3 2022 and the contract is understood to have options attached. 

Demand

bp was awarded 100% working interest for the King Mariout Offshore area (KOA) in Egypt. The company plans to drill an exploration well as well as conduct 3D seismic imaging in KOA.

Shell and APA Corp were awarded three exploration blocks off Uruguay by state-owned ANCAP. Shell was awarded Blocks OFF-2 and OFF-7, while APA was awarded Block OFF-6. Shell’s exploration program for its awarded blocks comprises evaluation of the oil geology and prospective resources, investment in 3D, gravimetric and magnetometric modeling, and information licensing. For its awarded block, APA plans to undertake the drilling of an exploratory well in the initial period of four years, the evaluation of oil geology and prospective resources, and the licensing of information. As per ANCAP, the proposed work programs on the three blocks involve investments worth approx. $200 million.

Sembcorp Marine completed the delivery of newbuild drillship Deepwater Atlas to Transocean. The rig is the first of two ultra-deepwater drillships built for Transocean based on Sembcorp’s proprietary Jurong Espadon 3T design, the other being Deepwater Titan. As per Sembcorp, Deepwater Atlas is capable of operating at water depths of 12,000 feet and drilling to depths of 40,000 feet, while being able to accommodate well control systems for 20,000 psi drilling and completion operations. The rig is scheduled to commence its maiden contract for Beacon in the US Gulf of Mexico during Q4 2022, with the initial workscope running into Q3 2023. Henceforth, the rig is scheduled to undertake further work for Beacon starting Q4 2023 for a duration of about one year.

Mobilisation

Ultra-deepwater drillship Polaris arrived in Malaysia for reactivation, contract preparation, and upgrades, prior to commencement of a 9-month contract with ONGC off India during Q4 2022. Owner Aquadrill had earlier informed that upgrades would include equipping the rig with piping required for future use of a Managed Pressure Drilling (MPD) system.     

Rig Sales / Charter

Borr Drilling signed a binding LOI with an undisclosed third party for the sale of three jackups currently under-construction at the Keppel Fels shipyard in Singapore—Tivar, Huldra, and Heidrun. The transaction is subject to closing conditions and is expected to conclude within 30 days. Total consideration for the sale is $320 million, which will be used to pay the delivery instalments of the three rigs. Borr said that the three rigs would expectedly be employed by the prospective owner in a ‘captive market’, thereby representing limited competition to Borr’s fleet. Borr added that the transaction forms a part of the refinancing and optimisation of its capital structure as it works to reduce its capital commitments. The company continues to actively engage with its creditors with a view to completing its refinancing and expects to update the market on the progress in the coming days. Worth noting that Borr had informed last month about Keppel’s intent to sell two rigs, Huldra and Heidrun, to a third-party buyer for a price of $100 million each. At that time Borr also informed that it had notified Keppel of its intent to take delivery of the rigs in H1 2023 against their previously scheduled delivery in 2025. Borr currently has two more rigs under construction at the Keppel yard—Var and Vale.

Other News

Equinor agreed to sell a 51% operating interest in the deepwater North Platte project in the US Gulf of Mexico to Shell. Equinor will retain a 49% interest in the project, which will be renamed to Sparta. The project straddles four blocks in the Garden Banks area in about 4,265 feet of water depth. The two companies will review the work that has been completed on the project and update the development plan. The transaction is subject to customary conditions and authority approval. Worth noting that the previous operator TotalEnergies announced its withdrawal from the project in February 2022, following which Equinor took over operatorship. A contract awarded by TotalEnergies for drillship Valaris DS-11 was subsequently novated to Equinor. Earlier this month, Valaris received a termination notice from Equinor for the contract awarded to drillship Valaris DS-11. The rig is currently stacked in the Canary Islands.

KeyFacts Energy Industry Directory: Esgian