By Nermina Kulovic, Esgian

No new drilling contracts were announced, but it was a busy week nonetheless with news on investments in new projects and plans for upcoming drilling operations. Meanwhile, a Borr Drilling jackup has left Singapore, while a Shelf Drilling unit is preparing to embark on its journey to the same destination.

Drilling Activity and Discoveries

Equinor Canada has asked for expressions of interest (EOIs) for feasibility and concept studies, front end engineering, planning and development for the company’s Bay Du Nord project offshore Newfoundland and Labrador. Equinor is expected to carry out a drilling campaign at Bay Du Nord in 2024. The EOIs include one for studies, front end engineering, planning execution and development for subsea umbilicals, risers, and flowlines (SURF) at Bay Du Nord, studies that cover different models for FPSO development, and studies that support operations and maintenance concept selection. The Bay du Nord project consists of several oil discoveries in the Flemish Pass basin, which Equinor intends to develop via an FPSO. In May 2023, Equinor and its partner BP decided to postpone the Bay Du Nord development project by up to three years in the face of changing market conditions and inflation. Equinor stated that it would use the postponement to optimise the project and continue to mature Bay Du Nord towards development. In August 2023, Equinor contracted the Odfjell Drilling-managed 10,000-ft semisubmersible Hercules for one well plus one optional well offshore Canada. The contract will begin around the second quarter of 2024 following the rig’s completion of work with Galp Energia in Namibia. 

UK operator Harbour Energy is expecting an increase in its capital expenditure for 2024, compared to the previous two years, driven by higher investment in the UK and internationally. In 2024, the operator expects a total capital expenditure of c.$1.2 billion, including a lower decommissioning spend of $0.2 billion. The guidance relates to Harbour's current portfolio and excludes any effects or contributions from the proposed acquisition of Wintershall Dea. In 2023, the company’s estimated total capex was c.$1 billion, including c.$0.3 billion of decommissioning, and in 2022 it totalled $0.9 billion. 2022 was the year when the UK government introduced the energy profits levy (EPL), also known as the windfall tax, amid the cost of living crisis. In response, Harbour, as well as several other operators in the UK, decided to reduce spending in the North Sea. Harbour also refrained from participating in the UK’s licencing round that year, and started a review of its organisation to be in line with lower future activity and investment in the country. Now, Harbour’s increased UK drilling activity is targeting high return, quick payback opportunities in its operated J-Area, Greater Britannia, and AELE hubs, in addition to the Talbot development. It also includes advancement of Harbour’s UK CCS projects, including FEED at Viking. Harbour has five rigs under contract in the North Sea region, three jackups and one semisub in the UK and one jackup in the Norwegian sector. The rigs are conducting a range of operations, from development to exploration drilling as well as P&A and accommodation work. With these, Harbour has contract coverage in the North Sea into Q3 2028 or even further into Q3 2032 if counting options. The 492-ft CJ70 jackup Noble Integrator has just recently started its one-well contract with Harbour in Norway, after leaving Stavanger anchorage where it had been warm stacked since September 2023. Over in the UK, Harbour has recently extended a contract for the 400-ft jackup Valaris 120, adding three more years of work to its backlog. 

Trident Energy has begun its infill drilling campaign at the Ceiba and Okume fields on Block G in Equatorial Guinea with Island Drilling 4,000-ft semisubmersible Island Innovator. The rig arrived in Equatorial Guinea for work with Trident Energy in November 2023. Trident Energy expected the three deepwater infill wells to come onstream by mid-2024. After these wells are completed, Island Innovator will move to Block S, where Trident Energy will use the rig to drill the Akeng Deep exploration well on behalf of operator Kosmos Energy. 

Valeura Energy has announced plans to invest $8 million in pursuing exploration opportunities within its licenses offshore Thailand, and a total Capex in 2024 of $135 – $155 million, for 2024. The company has identified exploration opportunities at Wassana North, Nong Yao D, and the Ratree Prospect, located near the Jasmine field. Final drilling sequencing and timing will be determined through ongoing work to optimise the drilling programme around Valeura’s development drilling plans. Approximately 75% of the company’s Capex is directed towards drilling. Valeura intends to have one drilling rig under contract for the entire year and to conduct a continuous drilling programme covering each of its fields. The drilling sequence itself is subject to ongoing real-time optimisation, Valeura said. Valeura has been conducting drilling operations in Thailand using Borr Drilling’s 350-ft jackup Mist. The rig is currently contracted through August 2024, with Valeura having an extension option that, if exercised, should keep the Mist busy until the end of 2025. The company said in December it would mobilise the rig to the Wassana field, which resumed production on 8 December. The rig, currently located in the vicinity of the MOPU Ingenium, will drill three wells at Wassana, to boost the field’s production capacity to over 4,000 bbl/d. The Mist will then be redeployed to the Nong Yao C development early in 2024. During Q4 2023, Valeura completed an infill drilling programme on the Jasmine field, and then an infill drilling programme on the Nong Yao field. Valeura drilled a total of 26 wells throughout 2023.

Demand

Jadestone Energy plans to begin drilling of a sidetrack well at the Montara field offshore Australia late in the fourth quarter of 2024 in order to restore production at the Skua-11 well, which has been offline since October 2023. The sidetrack will also target additional volumes in the vicinity of the existing location. Jadestone Energy stated higher levels of long-term repair maintenance activity and costs are required in order to maintain its Montara and Stag fields offshore Australia in an appropriate condition throughout their remaining life. Montara is in production licences AC/L7 and AC/L8 in the Timor Sea within the Vulcan Sub-Basin. Stag is located in the WA-15-L production licence in the Carnarvon Basin. 

The Norwegian Ministry of Energy has offered ownership interests in a total of 62 production licences on the Norwegian shelf to 24 companies as part of the awards in the pre-defined areas (APA) 2023 licencing round. This is an increase compared with the three previous years. Last year, 47 licences were awarded. In the autumn of 2023, the authorities reviewed applications from a total of 25 companies for the APA 2023. Of these 62 production licences that have now been offered, 29 are in the North Sea, 25 in the Norwegian Sea, and 8 in the Barents Sea. 16 of the production licences are additional acreage for existing production licences. A binding work program is linked to all the licences. The following companies have been offered parts in licences, or operatorships (parts/operatorships): A/S Norske Shell (1/1), Aker BP (27/17), Concedo (2/0), ConocoPhillips Skandinavia (3/2), DNO Norge (14/3), Equinor Energy (39/14), Harbour Energy Norge (1/1), INPEX Idemitsu Norge (5/1), KUFPEC Norway (2/0), Lime Petroleum (1/0), Longboat JAPEX Norge (1/0), M Vest Energy (1/0), Neptune Energy Norge (4/3), OKEA (3/1), OMV (Norge) (6/6), Pandion Energy (1/0), Petrolia NOCO (2/1), PGNiG Upstream Norway (10/1), Source Energy (3/0), Sval Energi (2/1), TotalEnergies EP Norge (1/0), Vår Energi (16/4), Wellesley Petroleum (1/1), Wintershall Dea Norge (13/5). 

Anasuria Hibiscus has made a Final Investment Decision (FID) for the Teal West development in the UK North Sea. The Environmental Statement (ES) was approved on 7 July 2023, with the Field Development Plan (FDP) approved on 1 August 2023. The company informed in January 2024 that the internal Final Investment Decision (FID) was taken on 23 September 2023. Due to supply chain delays, the first oil from the Teal West field is now expected by mid-2025. This was previously expected by late 2024/early 2025. The Teal West project is located in UK Licence P.2535 Block 21/24d in the Central North Sea. The base development plan for the field is to drill an oil producer well followed by the drilling of a water injector well approximately 12 to 18 months after the first oil. The field is planned to be produced to the Anasuria FPSO – about 4km away – where the well fluids will be processed and exported via the Anasuria infrastructure. 

Shell has taken a final investment decision (FID) on the Victory gas field in the UK North Sea, approximately 47 km northwest of the Shetland Islands. The UK Secretary of State agreed to the NSTA’s grant of consent on 10 November 2023 and the NSTA granted consent on 17 January 2024, so the project may proceed. The development is located in UKCS Block 207/01a. It will feature a single subsea well which will be tied back to existing infrastructure of the Greater Laggan Area system, using a new 16 km pipeline. In the environmental statement (ES) for the project, drilling operations with a semisubmersible rig were scheduled to happen between May and October 2024. First gas was targeted for Q4 2024. Now, it is anticipated the Victory field will come online in the middle of the decade and, at its peak, produce around 150 million standard cubic feet per day of gas (approximately 25,000 barrels of oil equivalent per day). Most of the field’s recoverable gas is expected to be extracted by the end of the decade. Victory’s gas will be processed onshore at the Shetland Gas Plant before being piped to the UK mainland to enter the National Grid at St Fergus, where Shell UK is also helping develop the Acorn Carbon Capture and Storage project.  

According to market sources, Heritage Oil has put out a request for information regarding a drillship to work offshore Ghana for around 45 to 60 days, starting from late 2024 to early 2025. The proposed work is understood to be for the drilling of the Mansonia-1X exploration well on the Offshore South West Tano (OSWT) Block. Heritage Oil has a 39.6% interest in the block and its operating company OSWT & EK Operating Company. The operating company has previously carried out well planning and preparations for Mansonia-1X and rescheduled the well from late 2022 into late 2023 and beyond. Water depths at OSWT are around 4,265 ft (1,300 m). In addition to Mansonia, Heritage has also identified the Edinam and Essia prospects. 

Market sources have indicated that TotalEnergies has issued a request for information (RFI) for a drillship to work in West Africa, potentially beginning in the fourth quarter of 2024. The RFI is for work that could take place offshore Namibia or the Congo. TotalEnergies is the operator of blocks 2912 and 2913B offshore Namibia and operates offshore fields Moho Nord, Moho-Bilondo, Nkossa, Nsoko II, Yanga and Sendji in Republic of the Congo. TotalEnergies has several floating rigs under contract in West Africa at this time, including 12,000-ft drillships Deepwater Skyros, Quenguela, and the 10,000-ft West Gemini in Angola, the 10,000-ft semisubmersible Deepsea Mira and the 12,000-ft drillship Tungsten Explorer in Namibia and the 12,000-ft drillship Noble Gerry de Souza in Nigeria. 

The Israeli government has approved Energean’s field development plan for Phase 1 of the Katlan development. The company expects to make a final investment decision upon finalisation of engineering, procurement and construction terms for the project, which are currently under negotiation. Energean renamed the Olympus area Katlan in 2023. The company intends to develop the Katlan/Tanin area offshore Israel in a phased development. Phase 1 includes the Athena, Zeus, Hera, and Apollo discoveries. Phase 1a will cover Athena and Zeus, followed by 1b with Hera and Apollo. Future phases will develop the remaining Katlan and Tanin fields.

Mobilisation/Rig Moves

The Greatship-owned 350-ft jackup Greatdrill Chaaru has commenced operations with Oil and Natural Gas Corporation (ONGC) offshore India. The rig completed its previous campaign with ONGC in India the first week of November 2023. After this, the rig performed its recertifications and contract preparations in Mumbai, India. With the commencement of this three-year campaign with the same operator, the rig will be busy until Q1 2027. Greatdrill Chaaru is a LeTourneau Super 116E Class rig that operates in water depths of 350 ft. 

Borr Drilling's 350-ft jackup Idun has left Singapore for its upcoming contract with PTTEP in Thailand. The Keppel FELS Super B Bigfoot Class unit had arrived at the Crystal Offshore Singapore yard in late in 2023 to undergo activation works ahead of the contract. The rig is expected to stay busy with PTTEP in Thailand until mid-January 2026. PTTEP has options to extend the contract further. The rig's previous contract with Petronas in Malaysia ended in early December 2023.  

Shelf Drilling North Sea’s 400-ft jackup, Shelf Drilling Perseverance, is preparing to leave the UK ahead of a new contract in Vietnam. Following an early release from a contract with IOG in the UK North Sea, the jackup, previously known as Noble Hans Deul, has been warm stacked in Invergordon since July 2023. It secured the new contract in Vietnam last December. The rig will be loaded onto the Seaway Osprey heavy-lift vessel on Tuesday 16 January 2024. The vessel is then expected to set sail from Invergordon around 20 January and reach Singapore in about 50 days. This means it will arrive in Singapore in the first half of March. Once there, it will be prepared for the contract with PetroVietnam, which is expected to start in Q3 2024. This will keep the rig busy into Q4 2025. 

The Foresight-owned 350-ft jackup Vivekanand 2 will perform its recertification and contract preparation in Mumbai, India. The Vivekanand 2 rig completed its previous campaign with ONGC in India in mid-January 2024, and it will now perform recertification and contract preparation for a new, three-year campaign with the same operator. This contract was awarded under Category I awards in Q4 2022. It is expected to start in Q1 2024, keeping the rig busy until Q1 2027. 

Stena Drilling has taken delivery of the 12,000-ft drillship Stena Evolution from Samsung Heavy Industries’ yard in Geoje, South Korea. The rig will soon mobilize to the US GOM for its maiden charter. The Samsung Tiger design 7th generation drillship was originally ordered by Ocean Rig in 2014 and went by the name Ocean Rig Crete. Ocean Rig was acquired by Transocean in late 2018, including two newbuild drillships but in September 2019 relinquished its interest in the newbuilds, one of which was the Ocean Rig Crete. Stena Drilling entered into a purchase option agreement with Samsung Heavy Industries for the unit in December 2021. In late May 2023, Stena Drilling signed a contract with Shell for Stena Evolution in the US GOM. This contract has a primary term of five years with an option to extend available. The rig is expected to begin to leave South Korea shortly and make its way to the US GOM, where it will begin work with Shell around April 2024. 

Aban Offshore 300-ft jackup Aban IV has commenced operations with Oil and Natural Gas Corporation (ONGC) offshore India. The Aban IV rig completed its previous campaign with ONGC in India in Q2 2023 and performed its contract preparations for the new contract in Mumbai, India. This contract was awarded under Category II awards in Q1 2023. With the commencement of this three-year campaign with the same operator, the rig will be busy until Q1 2027. Aban IV is a Baker Marine BMC-300-IC rig that operates in water depths of 300 ft.

Other News

Odfjell Drilling has announced the completion of the five-year main class renewal certificate for its 6,560-ft semisubmersible Deepsea Nordkapp. According to Odfjell, this was completed offshore while the rig was in full operation. With the class renewal now completed, the next one is due in January 2029. The unit is under a firm contract with Aker BP in Norway for the next several years with further options that could keep it busy throughout 2028.

Talos Energy has executed definitive agreements to acquire QuarterNorth, a privately-held U.S. Gulf of Mexico E&P company with ownership in several offshore fields, for $1.29 billion. Consideration for the transaction consists of 24.8 million shares of Talos’s common stock and approximately $965 million in cash. The board of directors of both Talos and QuarterNorth have unanimously approved the transaction, which is expected to close by the end Q1 2024. Talos President and CEO, Timothy S. Duncan, said the addition of QuarterNorth’s overlapping deepwater portfolio with operated infrastructure will increase Talos’s operational breadth and production profile while enhancing its margins and cash flow. QuarterNorth’s producing assets include six major fields and are approximately 95% operated and 95% in deepwater. The transaction also brings an inventory of drilling opportunities that will high-grade Talos’s inventory and will immediately compete for capital. QuarterNorth operates and holds a 50% working interest in the Katmai discovery in the Green Canyon region, producing an estimated combined 27 MBoe/d gross from two early-life wells. Talos expects the Katmai field to produce over 34 MBoe/d gross on average with minimal decline over the next several years based on a successful field development plan including two future well locations and a facilities upgrade project in early 2025. QuarterNorth’s interest in the Big Bend, Galapagos, Genovesa, and Gunflint fields represent attractive assets with future development potential. QuarterNorth has recently booked Seadrill’s 12,000-ft drillship West Vela for operations in the US Gulf of Mexico scheduled to start in June 2024. 

The Canada‐Newfoundland and Labrador Offshore Petroleum Board (C‐NLOPB) is amending the timing under its Land Tenure System for low activity offshore regions. Previously operating on a four-year cycle, a new two-year or three-year cycle will be implemented for all low activity regions with the length determined following the close of the Call for Nominations (Area of Interest). The Labrador North, Labrador South, North Eastern Newfoundland, South Eastern Newfoundland, Southern Newfoundland and Western Newfoundland and Labrador regions fall within the Low Activity category. Nominators will be provided the opportunity to submit their preferred timeframe as part of the nomination package. The C-NLOPB is also seeking input from stakeholders on selected low activity regions; Labrador South (Sector NL02-LS), Southern Newfoundland (Sector NL01-SN), North Eastern Newfoundland (Sector NL01-NEN), Western Newfoundland and Labrador. The Call For Bids closing date for these regions is currently set to 2025 for Labrador South, 2027 for Southern Newfoundland and 2029 for North Eastern Newfoundland, while the call for bids process is not currently active for Western Newfoundland and Labrador. Stakeholders are invited to provide their level of interest in each region; an alternative Call for Bids closing year for a sector; or confirmation that the current Call for Bids closing year for a sector is preferred. 

Vantage Drilling 375-ft jackup Topaz Driller will undergo extensive upgrades at a shipyard in Singapore later this year, ahead of a long-term contract with CPOC. Vantage Drilling stated that the upgrade will allow Topaz Driller to compete with high-spec rigs in Southeast Asia for the next decade and beyond. Topaz Driller recently mobilised to Cote d’Ivoire for work with Foxtrot with a firm term of 60 days with a 30-day option available. After the conclusion of this work, Topaz Driller will head to Singapore for upgrades. After this, the rig has a contract for two years of work plus nine months of available options with CPOC in the joint development area of Malaysia and Thailand, scheduled to begin in the second half of 2024. 

Despite the rig losing out on a recent tender with ONGC, Vantage Drilling stated that its client ONGC is continuing to look for options as to how to keep the 12,000-ft drillship Platinum Explorer in India and not lose it to other regions. In a letter to employees, Vantage stated that it remains focused on finding work for the rig. Platinum Explorer has been working for ONGC for the past several years, and ONGC recently extended the rig’s contract to keep it working on completion operations off the east coast of India into early Q1 2024. Once the rig finishes this work, it will go into the yard for its SPS, maintenance and an upgrade to its BOP. Vantage Drilling said the company is “confident in our ability to obtain alternative work for the Platinum Explorer and hope to see a minimum interruption to its utilization beyond its planned shipyard stay and BOP upgrades after the ONGC contract.” 

The 10,000-ft drillship West Polaris is expected to finish work for ONGC offshore India at the end of January 2024. After this, the current manager Vantage Drilling will mobilise the rig to Singapore to be handed over to its owner Seadrill, which will take over management of the rig. This is expected to be completed by early March 2024. Seadrill acquired the Vantage Drilling-managed drillships West Polaris and West Capella and the 10,000-ft semisubmersible West Aquarius in April 2023, when it completed its acquisition of Aquadrill. The cold stacked West Aquarius has already been returned to Seadrill’s management. Vantage Drilling will continue to manage West Capella while it works offshore Indonesia for Harbour Energy in 2024 and possibly into 2025 if options are exercised. West Polaris is unlikely to remain in Singapore for long. In late December 2023, Seadrill secured a 1,064-day contract for the rig with Petrobras offshore Brazil, with commencement set for November 2024.  

Energean is in discussions with Egyptian authorities to merge its Abu Qir, North El Amriya (NEA) and North Idku (NI) production concessions offshore Egypt into a single concession. Energean stated that the resultant single concession is expected to streamline the fiscal conditions and extend the economic life of the fields. The NEA and NI concessions are both 100% owned by Energean and operated through separate joint ventures. Energean also has a 100% interest in Abu Qir. All three fall under the overall management of Abu Qir Petroleum. Abu Qir Petroleum completed development drilling at NEA/NI with Egyptian Drilling 375-ft jackup El Qaher I in late 2023 with wells PY#1 and NI#1 brought online on 30 December 2023. Overall production from the fields is currently 72 mmscfd. El Qaher I was then used to drill infill well NAQPII#2 on the Abu Qir field. The rig began drilling this well in December 2023 and the well was brought online in January 2024. Energean is evaluating other infill and exploration opportunities around its Abu Qir hub. 

A commercial review of the Shell-operated Pensacola discovery in the UK North Sea has illustrated the commercial potential of the discovery based on two potential development scenarios. This comes following a positive well investment decision for the Pensacola appraisal well in December 2023. Pensacola discovery is located in Licence P2252, which is operated by Shell, with Deltic Energy and ONE-Dyas participating as partners. Pensacola is the second of two wells Shell plans to drill in 2H 2024. The first one is the Selene exploration well. Rig tendering process is underway for both wells. Deltic commissioned RPS Energy to undertake a technical review of the volumes and a commercial review of the Pensacola discovery. This assessment builds on the company's previous estimates of technically recoverable volumes and for the first time illustrates the commercial potential of the Pensacola discovery based on two potential development scenarios - a gas and oil (or "combined") development and a gas only development. RPS estimates the Pensacola structure to contain gross P50 Hydrocarbons Initially in Place of 326 MMboe, in-line with Deltic's previous estimate of 342 MMboe. The first of two possible development scenarios includes a combined oil and gas development requiring two separate production platforms and six horizontal wells (three gas and three oil producers) with hydrocarbons exported to Teesside via a new pipeline. The second development scenario includes a lower capex gas only development comprising three horizontal development wells producing via a normally unmanned installation exporting gas through a new pipeline to Teesside. The JV continues to mature the opportunity and optimise the potential development scenarios.

KeyFacts Energy Industry Directory: Esgian