Soumya Mutsuddi, Esgian

This week a Maersk jackup received contract extension off Denmark, and a Transocean semisub concluded a short-term job off Malaysia. Meanwhile, drillship Stena Forth departed Canada to return to the Mediterranean for forthcoming work.

Contracts

Harsh-environment jackup Maersk Interceptor received an extension to its accommodation services engagement with TotalEnergies in the Danish North Sea, as the operator exercised an option to add two months to the contract. The contract extension will commence in November 2022, in direct continuation of the rig’s current contract. Also, two 2-month options still remain on the contract.

Drilling and discoveries

Aker BP announced that wildcat well 6507/3-15 in the Norwegian Sea (operated production licence 941) encountered an oil and gas column totaling about 115m. As per the operator, preliminary estimates place the size of the discovery between 1.7 and 5.7 million standard cubic metres of recoverable oil equivalent. Aker BP informed that the licensees will consider producing the discovery via the nearby Skarv field. The well was drilled by the harsh-environment semisub Deepsea Nordkapp, which is next scheduled to drill the wildcat well 6507/3-16 in the same production licence. 

PGNiG received exploration drilling permit for wildcat well 6608/1-1 S in its operated production licence 1017 off Norway. Drilling would be undertaken by the harsh-environment semisub Deepsea Yantai during August 2022.

JV partner Ecopetrol confirmed the presence of natural gas at  Shell's Gorgon-2 well off Colombia. The well was drilled by the ultra-deepwater drillship Deepwater Thalassa. The well confirms the extension of the 2017 Gorgon-1 gas discovery and confirms the existence of a gas province off Colombia, with the 2015 Kronos and 2017 Purple Angel discoveries. Shell and Ecopetrol hold 50% interest each in the South Caribbean blocks.

Ultra-deepwater semisub Deepwater Nautilus completed a two-well engagement with Mubadala Petroleum off Malaysia last week and moved inshore Labuan, Malaysia. Presently, there is no visibility on any upcoming work for the rig. 

Demand

Shell submitted an environment plan (EP) to NOPSEMA for its operated Crux natural gas field, off Australia. The Crux field is located in Commonwealth waters in the northern Browse Basin, in depths of about 165m and Shell reached project FID in May 2022. Installation of the drilling template is the first activity to be undertaken in relation to the EP and proposed to occur in Q2 2023, approximately three months ahead of the arrival of a semisub for drilling wells. Following the arrival of the rig, drilling activities will commence for a planned duration of approx. 10 months, with an additional 10-month contingency drilling period. At the completion of the drilling campaign, the wells will be temporarily suspended and subsequent well completion activities will be undertaken following the topside installation. While market sources indicate that the semisub lined up for the drilling campaign is Valaris MS-1, rig owner Valaris has not identified the client or project name in its latest fleet status report, merely indicating that the rig’s contract ‘remains subject to final customer approval’ and scheduled to commence in October 2023.

ONGC and ExxonMobil signed a Heads of Agreement (HoA) for deepwater exploration offshore India’s east and west coasts. The collaboration areas focuses on the Krishna Godavari and Cauvery Basins in the eastern offshore and the Kutch-Mumbai region in the western offshore. ONGC said that there has been scientific exchange of exploration data between the two companies in the last few years, which led to this partnership. ONGC added that this collaboration will be a strategic fit where ONGC’s knowledge and past experience in these areas will be coupled with ExxonMobil’s global insights. ONGC has been looking to boost exploration activity off India and, earlier this year, announced an exploration budget of approx. $4 billion for the period FY2022-25 (150% increase over the previous budget). ONGC had also indicated plans to leverage international collaborations with ‘reputed global majors’ to boost exploration, and said talks were in advanced stages. To support exploration and development drilling off India, ONGC is looking to ramp up rig counts and recently launched a tender for 12 jackups. The operator is also expected to shortly launch a tender for two 3,000m drillships for exploration drilling. 

Mobilisation / Upgrades

Harsh-environment drillship Stena Forth departed Canada after finishing its campaign with ExxonMobil. The rig is headed to the Mediterranean where it is scheduled to commence its next contract with Chevron off Egypt during Q4 2022. Following that, the rig has further work lined up with Chevron off Cyprus with start expected during Q1 2023.

Harsh-environment semisub Island Innovator commenced mobilisation to undertake its next drilling campaign with Eco (Atlantic) Oil & Gas. The rig is scheduled to drill the Gazania-1 exploration well in the Orange Basin (Block 2B) off South Africa. Island Innovator is expected to arrive on location and spud the well by end of September 2022, subject to weather conditions. Eco informed that drilling will take approx. 25 days, following which the well will be sealed and plugged. The Gazania-1 prospect is targeting a 300 million barrels light oil resource. The licence partners have also approved the option to drill a sidetrack well contingent on a discovery in the main target.

Well-Safe Solutions teamed up with Trendsetter Engineering to equip the semisub Well-Safe Guardian with the Trident Intervention System. As per Well-Safe, Trident is an effective single-system solution which can be configured for hydraulic intervention, riserless light well intervention, and open water intervention riser operations. The main application for the system will be in open water intervention riser mode, providing secure mechanical access for wireline or coiled tubing operations, Well-Safe added. Further, the company also noted that the partnership provides it with exclusive access to the system in the UK for well P&A. The Well-Safe Guardian is currently engaged in operations for CNR in the UK North Sea, following which it is scheduled to commence a contract with Repsol in early 2023. 

Other News

Vår Energi acquired 30% ownership in production licences (PL) 820S and PL 820 SB (north of the Balder field in the North Sea) off Norway from Lime Petroleum, Pandion Energy and Lundin Energy (now Aker BP). Vår has been proposed as the new operator for these licences with the transaction pending government approval. As Vår Energi also acquired PL 917 and PL 917B (west of the Balder field) from Lundin Energy in an equity swap earlier this year, this provides it with the operatorship and 20% additional equity share in return for reduced equity in PL 956 and PL 985. The new partnership arrangement  for PL917 and PL917B includes Vår Energi (operator, 40% interest),  Aker BP (40%), and Suncor Energy (20%). Vår confirmed that this transaction has been approved by authorities.

JV partners Santos (operator, 80%) and Carnarvon Energy (20%) postponed FID on the Dorado development off Australia. Santos said in its half yearly results for 2022 that ‘the inflationary cost environment and supply chain uncertainty does not support project FID in 2022’. Carnarvon Energy, in a separate update, said that the Dorado FEED process is substantially complete with the project being close to FID ready. The main outstanding work is the finalisation of the EPC contract for the FPSO vessel. However, Carnarvon noted that ‘given the current regional inflationary pressures and supply chain challenges, the risk of cost escalation is unacceptably high and requires fiscal discipline until this environment shows signs of stabilising’. As such, finalisation of the FPSO contract requires ‘the cost environment to be more stable along with more certainty around supply chain capacity’, Carnarvon added. Carnarvon further noted that ‘because the FPSO represents more than 50% of the expected project cost, it is important that this work scope is carefully contracted and managed, especially in the current supply chain environment’. The initial development plan for the Dorado project involves the drilling of ten wells and the production of hydrocarbons through an FPSO.

KeyFacts Energy Industry Directory: Esgian