By Nermina Kulovic, Esgian

New rig contracts this week include a one-well contract for drillship Valaris DS-15 offshore Brazil and an exercised option for jackup Valaris 106 in Indonesia, while Dolphin Drilling has come in as the low bidder in a rig tender offshore India.

Contracts

Valaris 12,000-ft drillship Valaris DS-15 has been awarded a one-well contract with bp offshore Brazil, expected to commence in the late first quarter or early second quarter of 2024 in direct continuation of the rig’s contract with TotalEnergies. The newly-awarded contract has an estimated duration of 80 days and an estimated contract value of around $33 million, excluding payments for mobilization and additional services. The dayrate for the bp contract is around $410,000. Due to this new fixture, a previously exercised option for Valaris DS-15 with TotalEnergies offshore Brazil will now begin in direct continuation of the BP contract. This option is now expected to begin in late second quarter or early third quarter 2024 and run for around 100 days at a dayrate of $254,000. 

bp Indonesia has exercised a five-well priced option for 400-ft jackup Valaris 106. This optional period is expected to run for 365 days and start in January 2024 in direct continuation of the rig’s existing firm program with bp. The dayrate for this newly exercised option is $85,000, effective 6 January 2024. Valaris 106 has been working for bp offshore Indonesia since early 2018. Valaris 106 is expected to be out of service for approximately 90 days for planned maintenance across the second quarter and third quarter of 2024.

Dolphin Drilling AS has been announced as the lowest bidder in an Oil India rig tender, offering the 1,500-ft semisubmersible Borgland Dolphin. Contract negotiations will commence shortly. The tender is for a firm 14 months of work, with options for an extension of up to 7 months. The tender process was initiated in January 2023. Subject to final award, the contract start date is expected to be in Q3 2024. Borgland Dolphin is currently stacked in Norway. 

Transocean has confirmed that ultra-deepwater drillship Deepwater Aquila has been awarded a three-year contract with Petrobras, as reported in early September. The major drilling contractor has also agreed to acquire the outstanding interests in Liquila Ventures Ltd. The contract with Petrobras will commence in Q3 2024 and the contract value is around $486 million, excluding a mobilization fee of around 90 timeds the contract dayrate (approx. $40 million).Transocean will acquire the outstanding interests in Liquila Ventures Ltd., the company that acquired the Deepwater Aquila, from its joint venture partners Perestroika and Lime Rock Partners. Transocean will explore debt financing alternatives to partially fund the costs associated with acquiring the drillship. The drillship is expected to be delivered from the Hanwha Ocean yard in South Korea in October 2023. 

Drilling Activity and Discoveries

ExxonMobil’s Gale N-66 well on EL 1167 in the Jeanne d’Arc Basin offshore Newfoundland, Canada, has been abandoned after the well showed no evidence of commercial hydrocarbons. ExxonMobil stated that the company remains committed to investment in the region and plans are underway to drill an exploration well in the Orphan Basin, possibly as early as 2024.The Gale well was spud on 17 July 2023 with Odfjell Drilling-managed 10,000-ft semisubmersible Hercules. Hercules is now understood to be leaving Canadian waters for Las Palmas in the Canary Islands. The rig’s next contract is with Galp Energia, which has hired Hercules to drill two wells offshore Namibia. This work is expected to begin in the fourth quarter of 2023. After this, Hercules will return to Canada for a one-well contract with Equinor. 

Borr Drilling jackup Norve has begun drilling DRM-3H, the fifth well at BW Energy’s Hibiscus / Ruche Phase 1 development on the Dussafu licence offshore Gabon. Norve recently finished drilling the DHIBM-6H well, which is now producing at around 6,500 b/d. BW Energy is using the rig for a six-well campaign, including four Hibiscus Gamba and two Ruche Gamba wells. DRM-3H is the first Ruche Gamba well. Once all six wells are finished in early 2024, BW Energy expects total production at the development to reach around 40,000 b/d. Oil produced at Hibiscus / Ruche is transported by pipeline to the BW Adolo FPSO for processing and storage before offloading to export tankers.

Demand

The UK North Sea Transition Authority (NSTA) has given bp approval to progress the development of the Murlach field in the North Sea. Murlach is on Block 22/24h (Licence P2452) of the Central North Sea in around 305 ft of water and is a redevelopment of the Skua field that was previously in production in the early 2000s. The proposed development includes the drilling of two production wells tied back to a new manifold and the installation of a flowline from the Eastern Trough Area Project facility to the new manifold. Drilling and installation is expected to begin in 2024 with first production in 2025. 

TotalEnergies and its partner APA Corporation have launched development studies for a large oil project in Block 58 offshore Suriname. Detailed engineering studies will begin by the end of 2023 and a final investment decision is expected by year-end 2024 with a first production target of 2028. TotalEnergies is the operator of Block 58 with a 50% interest. APA Corporation holds the remaining 50% interest. TotalEnergies has carried out drilling on Block 58 this year with Noble 12,000-ft drillship Noble Valiant and more recently Transocean 10,000-ft semisubmersible Development Driller III. APA Corporation stated that the drilling and testing of two wells at Sapakara South and three wells at Krabdagu had confirmed combined recoverable resources of around 700 million barrels of oil for the two fields, located in water depths of around 328 to 3,280 ft. The fields are to be produced through a system of subsea wells connected to an FPSO with an oil production capacity of 200,000 b/d. 

Equinor has submitted a plan for development and operation of the Eirin gas field in the North Sea to Norway’s Ministry of Petroleum and Energy. The field is to be developed as a subsea facility tied back to the Gina Krog platform through a production flowline and umbilical.  Eirin was discovered in 1978 and lies in around 394 ft of water. Recoverable reserves in the field are estimated at 27.6 million BOE, mainly in natural gas. The field will be developed as a subsea facility ready for the tie-on of any future discoveries, including an optional expansion for two to four new wells. Equinor estimates total investments in the development at just over NOK 4 billion. The company stated that the development would extend the productive life of Gina Krog from 2029 to 2036. Equinor is the operator of the licence with a 78.2% interest, while KUPFEC holds 21.8% interest. 

Mobilisation/Rig Moves

Newbuild drillship Arpoador has been transported by Seaway7 Heavy Lift Vessel (HLV) Seaway Hawk from Jurong Shipyard in Brazil to Singapore. According to updates on GC Captain forum, the drillship was loaded on June and arrived in Singapore in September.

Other News

Ithaca Energy has agreed to acquire the remaining 30% stake in the UK North Sea’s Cambo field from Shell U.K. Limited. Subject to regulatory approval, this acquisition would increase Ithaca’s stake in Cambo to 100% and give it full control over the future development of the field. The consideration due to Shell is payable on the earlier of first oil from Cambo or the receipt of proceeds of any subsequent sale of a working interest in Cambo by Ithaca Energy; and is subject to Ithaca Energy proceeding with FID and/or the North Sea Transition Authority providing development consent. The Cambo field is an undeveloped oil and gas discovery in the West of Shetland region of the UK North Sea. 

Guyana’s Ministry of Natural Resources has received bids in its 2022 Guyana Licensing Round, which offered 14 offshore blocks for oil and gas exploration. Bids will be evaluated beginning 18 September 2023 with the award of contracts expected in November 2023. Bids were received from a consortium of TotalEnergies, QatarEnergy and Petronas, a consortium of Delcorp Inc., Watad Energy and Arabian Drillers, a consortium of ExxonMobil, Hess, and CNOOC, a consortium of Liberty Petroleum Corporation and Cybele Energy, Sispro Inc., and a consortium of International Group Investment Inc and Montego Energy S.A. The round was launched in December 2022. A total of 14 blocks were offered, including three deepwater blocks and 11 shallow water blocks. In June 2023, Guyana’s government released the Draft Petroleum Activities Bill of 2023 for public consultation. The Petroleum Activities Bill is intended to replace the Petroleum (Exploration and Production) Act 1986 as part of the government’s stated intention to modernize the legal and regulatory framework related to the petroleum sector in the country. 

Longboat Energy has acquired privately held company Topaz Number One Limited, increasing its working interest in the Production Sharing Contract (PSC) for Block 2A offshore Sarawak, Malaysia to 52.5%. Topaz’s sole asset is a 15.75% interest in Block 2A, which contains the Kertang prospect. Longboat stated that the acquisition would simplify the process towards a positive well decision and the potential introduction of an additional partner prior to drilling at the prospect. Longboat is the operator of Block 2A. Its remaining partners include Petronas and Petros. 

KeyFacts Energy Industry Directory: Esgian