Soumya Mutsuddi, Esgian

This week a couple of Seadrill drillships commenced reactivation/upgradation work in preparation of their upcoming charters off Brazil. Meanwhile, Saipem and Shelf Drilling inducted new jackups into their respective fleets.

Drilling and discoveries

Harbour Energy completed drilling of the Timpan-1 exploration well in the Andaman PSC off Indonesia and informed that the well encountered a 390 foot gas column. The well is located in water depth of 4,245 feet and was drilled to a total vertical depth of 13,818 feet. While the well encountered a material gas accumulation, further work would be required to establish commerciality and the full potential of this play across the licence, Harbour added. Further, Harbour said that it will look to work with its partners and the Government of Indonesia to determine the potential for commercialisation of this discovery. The well was drilled by ultra-deepwater drillship Capella, which is next scheduled to drill the Rencong-1X exploration well for Repsol off Indonesia. 

Aker BP announced a gas discovery at the Storjo exploration well in production license 261 near the Skarv field off Norway. The well encountered gas in several geological formations, with preliminary estimates of recoverable gas volumes being between 25 and 80 million barrels of oil equivalent (mmboe). Aker BP said that further delineation of the discovery is planned in 2023. Drilling was undertaken by the harsh-environment semisub Deepsea Nordkapp, which is next scheduled to drill wildcat well 6507/3-15 in Aker BP-operated production licence 941 in the Norwegian Sea.

Serica Energy spudded the North Eigg HPHT exploration well (3/24c-NE1) in the North Sea off UK using the harsh environment semisub Paul B. Loyd, Jr. In case of a discovery, North Eigg would be developed utilising Serica’s nearby operated infrastructure on the Bruce platform. Serica noted that results of the North Eigg well are expected in mid-October. Serica is the 100% owner and operator of the North Eigg exploration well. 

ConocoPhillips concluded drilling of wildcat well 6306/3-2 in its operated production licence 935 off Norway. The well was found to be dry and will be permanently plugged and abandoned. Drilling was carried out by harsh-environment semisub Transocean Norge, which is next scheduled to drill wildcat well 25/7-10 in ConocoPhillips-operated production licence 782 S off Norway. The rig’s firm engagement with the operator runs into September 2022 and there are options attached to the contract. 

JV partner DNO informed that no commercial hydrocarbons were discovered at the Edinburgh exploration well (30/14a- 5) in Shell-operated license P255 off the UK, with the well being plugged and abandoned. The well was drilled by jackup Valaris 122 and the rig’s firm work with Shell runs into Q1 2023. 

Diamond Offshore semisub Ocean Onyx completed a drilling campaign for Beach Energy in the Otway Basin off Australia. The campaign involved drilling a total of seven wells, including one optional well. During the engagement, one new gas discovery was made at the Artisan field and six development wells were completed in the Geographe and Thylacine fields. Ocean Onyx will be demobilised to Port of Dampier for warm stacking and will be actively marketed for potential opportunities.

Borr Drilling informed BW Energy that delivery of jackup Norve may be postponed towards end 2022 due to the potential exercise of the final remaining options by the rig’s current charterer, and a change out of the rig`s BOP. Norve is scheduled to start a job for BW Energy off Gabon during October 2022 with the firm period running into April 2023. The contract also has a 4-well option attached to it. The rig is currently working for Vaalco off Gabon on a 2-well firm contract with options for two additional wells. 

JV partner Horizon Oil informed that following completion of the first phase of development drilling at Roc Oil-operated WZ12-8E field in Block 22/12 off China, jackup COSLStrike commenced drilling the WZ12-8E A8 exploration well in the field. Drilling is expected to take approximately four weeks to reach an anticipated total depth of 1,260 m. Horizon added that in the event of a discovery, the well can be brought on to production through the WZ12-8E infrastructure within a few days, and in case of a dry hole, the well could possibly be side tracked into the Jiaowei reservoir as an additional production well. Horizon Oil currently hold 55% interest in the WZ12-8E A8 exploration well, with other partners being Roc Oil (Operator, 40%), and Oil Australia (5%). In the event of a discovery, CNOOC may elect to back in for 51% such that Horizon’s ultimate participating equity interest in the well may be reduced to 26.95%. 

Demand

Pemex and New Fortress Energy (NFE) agreed to develop the Lakach field off Mexico under an arrangement in which the natural gas field will be further developed to supply Mexico's domestic market and NFE will produce LNG for export. Under terms of the agreement, NFE will invest in the continued development of the field over a two-year period by completing seven wells. NFE will also deploy a floating LNG unit to liquify the majority of the gas. Remaining gas and associated condensate volumes will be used by Pemex for Mexico's domestic market. The partners estimate the field will produce for about 10 years, but this may be extended if nearby fields are also developed. The agreement is subject to customary closing conditions and finalisation of related agreements.

Aker BP’s plan for development and operation for the Frosk field in the Alvheim area off Norway was approved by the Norwegian Ministry of Petroleum and Energy. Total investments in the project are projected at approx. $230 million and recoverable resources at Frosk are estimated at around 10 million barrels of oil equivalent (mmboe). Aker BP added that two new production wells are to be drilled in the field and first oil is planned in Q1 2023.

PRIO (formerly Petro Rio) concluded the drilling of the first well in its revitalisation campaign at the Frade field off Brazil in lesser than expected time and lower than estimated costs. Due to the well’s lower execution period and cost, PRIO anticipates the drilling of an additional producer well, the MUP3A. As a result, the first phase of Frade’s revitalisation campaign now includes four wells (two producers and two injectors), and the CAPEX relating to the phase remains the same as per initial estimates, PRIO informed. Drilling is being undertaken by Ocyan semisub Norbe VI, with the rig’s firm contract running into Q3 2023 along with options attached. 

ONGC is understood to have invited drilling contractors to a virtual pre-tender event on 20th July to introduce its upcoming rig requirements and boost participation. The upcoming rig tenders of ONGC are understood to comprise of three jackup tenders for a total of 12 rigs, and one floater tender for two drillships. For the jackup tenders, one lot will be for charter of six rigs (MLT/BMC design) for drilling, the second lot will be for charter of four rigs (MLT/BMC design, 300 ft IL Cantilever type) for workover/drilling operations, and the third lot will be for charter of 2 rigs (F&GL design, 300 ft IL Cantilever type) for workover/drilling operations. The floater tender involves a requirement for two drillships for exploration drilling, capable of operating in water depths of 3,000m. As these tenders are still to be formally issued by ONGC, their commencement depends on the timeline of their eventual issue and award. With respect to duration, ONGC jackup tenders tend to be typically for 3 years, while floater tenders could be between 1-3 years. 

TotalEnergies executed a Technical Cooperation Agreement with Lakes Blue Energy NL for the potential development of Petroleum Prospecting Licence (PPL) 560 off Papua New Guinea (PNG). PPL 560 covers the Cape Vogel Basin in shallow waters off PNG and contains the Buna prospect, which is estimated to have in excess of 3 trillion cubic feet (tcf) of natural gas. Under terms of the agreement, TotalEnergies will bear costs of undertaking a Phase A technical work program involving geological and geophysical studies. Subject to completion of Phase A, TotalEnergies has the option to undertake at its cost a Phase B work program involving seismic acquisition to delineate the Buna prospect in preparation for drilling. If Phase B is completed, TotalEnergies has the option to acquire a 75% interest in PPL 560 by funding the first $30 million of the cost of drilling the first exploration well within the licence. Any additional costs will be shared between the JV partners, and Lakes Blue Energy will retain a 25% interest in the prospect. 

Saipem informed that jackup Perro Negro 11 (formerly Gulf Driller VII) was officially christened and joined its offshore rig fleet. The ceremony was held in CIMC shipyard in Longkou (China) with participation from CIMC Raffles, Ocean Challenger, and Saipem. In June 2022, Saipem had entered into an agreement with Ocean Challenger, the asset management company of CIMC, to bareboat charter the rig for deployment in the Middle East. The rig would be taken to the Middle East by August for modifications, following which it will commence a 5-year contract with Saudi Aramco towards end 2022. The contract also includes options for two additional years. Equipped with MH Wirth drilling equipment, the rig is 70m long and 76m wide with maximum operational water depth of 120m, and can reach a maximum drilling depth of upto 10,668m. Saipem also informed that, during the ceremony, it signed an MoU with CIMC Raffles to explore future business opportunities in its business segments related to offshore drilling, offshore construction, and new energies.

Mobilisation / Upgrades

Ultra-deepwater drillships WestCarina and West Jupiter commenced their reactivation and upgradation projects in Tenerife. For the West Carina, the focus will be on upgrading the BOPs and enhancing the MPD system, Seadrill informed. Both rigs are scheduled to commence 3-year charters with Petrobras, with West Carina expected to start during Q3 2022 and West Jupiter towards end 2022.

Borr Drilling jackup Ran completed its accommodations job with Petrofac off the UK and has been moved to the Firth of Forth ahead of its transport to Mexico on a heavy-lift vessel. In Mexico, the rig is scheduled to commence a charter with Wintershall Dea in September, which is expected to run until February 2023.

Rig Sales / Charter

Shelf Drilling completed the acquisition and took delivery of jackup Deep Driller 7 from Aban Offshore. Shelf informed that the rig has been renamed to Shelf Drilling Victory. In June 2022, Shelf had entered an agreement with Aban for the purchase of the jackup against a price of $30 million. The rig was built in 2008 and is of Baker Marine Pacific Class 375 design. It has not worked in the last few years and is currently stacked in the UAE.   

Market sources indicate that Petroserv sold its 2013-built GVA-7500N semisub SSV Catarina to a group of Norwegian investors. However, Petroserv will maintain commercial and operational management of the rig. The rig is scheduled to commence an engagement for Eni off Indonesia during July, with the workscope involving one firm and one optional well.  

Other News

Kistos announced completion of its acquisition of a 20% interest in the Greater Laggan Area (GLA) producing gas fields and associated infrastructure along with various interests in other exploration licences from TotalEnergies. The effective date of the acquisition is 1st January 2022 and its completion marks Kistos' entry into the United Kingdom Continental Shelf. Under the deal, Kistos acquired a 20% working interest in the producing Laggan, Tormore, Edradour, and Glenlivet gas fields located off the UK. The acquisition also includes a 20% interest in the undeveloped Glendronach gas field, which will be developed via a single production well. As per Kistos, a final investment decision on Glendronach is expected later this year. Further, the acquisition also includes a 25% interest in block 206/4a off the UK containing the Benriach exploration prospect.

Waldorf Production entered into a binding Sale and Purchase Agreement with Shorelight Partners for the acquisition of Alpha Petroleum Resources. Alpha Petroleum’s assets include a 100% working interest in the Cheviot field and an operated interest in three late life/redevelopment fields in the Southern Gas Basin off the UK. Cheviot is one of the largest undeveloped fields in the UK North Sea, with estimated contingent resources of 50 MMbbls oil and 120 bcf gas.

KeyFacts Energy Industry Directory: Esgian