Hans Jacob Bassoe, Esgian

This week Shelf Drilling announced the award of a three-year contract from ONGC offshore India, while Odfjell reported a contract extension offshore Norway for its semisub Deepsea Yantai. Meanwhile, Saipem announced delivery of the new 7th gen. drillship Samsung Santorini and Petrobras outlined its E&P spending priorities through its Strategic Plan 2022-26.

Contracts

Shelf Drilling has received an award for a three-year contract for its 1978-built jackup Ron Tappmeyer with Oil and Natural Gas Corporation (ONGC) for offshore operations in Indian waters. The rig is currently under contract with ONGC with a scheduled completion date in Q2 2022. The planned start-up of operations under the new contract is Q4 2022.

Neptune Energy has extended its contract with Odfjell Drilling for the use of harsh-environment semisub Deepsea Yantai, to include three additional wells in the Norwegian North Sea next year. The rig is currently drilling production wells at the Neptune-operated Fenja field in the Norwegian Sea. The extension will include one additional well at the Fenja field and two exploration wells within core areas of the Norwegian sector. Neptune also has the option to include additional wells under the current contract. Neptune Energy’s Managing Director for Norway, Odin Estensen, said: “The extension of the contract for the Deepsea Yantai plays a vital role in our busy drilling program for next year, including both development and exploration drilling in our core areas with a clear ambition to further grow our business on the Norwegian Shelf.” The Deepsea Yantai, owned by CIMC Raffles, has been operating for Neptune Energy in Norway since November 2019. This included completion of the appraisal and production wells at the two new Gjøa P1 and Duva fields, and several exploration wells including the Dugong discovery last year.

Noble Corp has progressed investigation and repair works of the rig leg of jackup Noble Hans Deul at Dundee port to allow safe resumption of Phase 1 drilling at IOG's Southwark field offshore the UK. Repair operations have required equipment and personnel to be mobilised from the Middle East and Asia and the rig is expected to re-mobilise to Southwark by the first week of December, subject to weather, and Southwark First Gas remains on track for Q2 2022. Meanwhile, IOG has secured the rig for two more wells next year, covering the drilling of the Kelham North / Kelham Central and Goddard appraisal wells after the second Southwark well, on the same competitive dayrate as the Phase 1 wells. Petrofac has been appointed Well Operator for the two appraisal wells and pre-drill site surveys are being planned for Q1 2022. In parallel, analysis of reservoir and production data from the Southwark 1 and 2 wells will inform an optimal Southwark 3 well plan.

Western Gas and Valaris have executed a formal contract which will involve the ultra-deepwater 6th gen. semisub Valaris MS-1 drilling the Sasanof-1 exploration well in permit WA-519-P, offshore Western Australia. It was earlier announced that Global Oil and Gas Ltd had finalised the purchase of 25% of Western Gas (519P) Pty Ltd, the holding company for permit WA-519-P. The acquisition will involve Global Oil and Gas funding 50% of drilling costs for the Sasanof-1 well, which are estimated to be in the range of $20-25 million. Sasanof-1 will be a vertical well and drilled to a total depth of approximately 2,500 m in 1,070 m of water. Valaris MS-1 will relocate to the Sasanof prospect following completion of its current engagement for Eni, also in Australian waters. 

Drilling and discoveries

Lundin Energy Norway AS has received a drilling permit from the Norwegian Petroleum Directorate (NPD) for wildcat well 6306/9-1 in production licence 886 in the Norwegian Sea. Lundin Energy is the operator with 60% ownership while other partners are Spirit Energy Norway AS (20%) and Petoro AS (20%). The area in this licence consists of parts of blocks 6306/6, 6306/8 and 6306/9. The well will be drilled around 72 km east of the Ormen Lange field using the Odfjell Drilling owned 6th gen deepwater and harsh environment semisub Deepsea Stavanger. The exact timeframe for drilling is still to be confirmed, however, it is worth noting that the rig is scheduled to commence an exploration drilling gig with Equinor during the first quarter of 2022.   

Petrobras has made a new discovery while drilling an exploration well within the Aram block, in the Santos Basin pre-salt, offshore Brazil. The 1-BRSA-1381-SPS (Curacao) well is located 240km from the cuty if Santos-SP, in a water depth of 1,905m.  

CNOOC Ltd has announced commencement of production from the Lufeng oil fields regional development project located in Eastern South China Sea. The fields include Lufeng 14-4 oil field, Lufeng 14-8 oil field, Lufeng 15-1 oil field and Lufeng 22-1 oil field, with an average water depth of about 140-330m. The main production facilities include two drilling production platforms and one subsea production system. CNOOC has plans of drilling 35 development wells, including 26 production wells and 9 water injection wells. The project is expected to achieve its peak production of approximately 46,000 barrels of crude oil per day in 2023. CNOOC owns 100% interest in the project.

Demand

Santos has outlined plans to drill three new exploration wells—Yoorn-1, Jelen-1, and Parnassus-1—located in blocks WA-499-P, WA-546-P and WA-208-P respectively, offshore Western Australia. Yoorn-1 is planned to be drilled over a 90-day period in the second and third quarters of 2022, while Jelen-1 and Parnassus-1 are to be drilled over a 50-day period each in the fourth quarter of 2023. Santos has invited public comments on a geophysical site survey required at blocks WA-546-P and WA-208-P (Jelen-1 and Parnassus-1) to assess the shallow seabed soil’s suitability to provide a safe foundation for a jackup. The geophysical survey is planned for a window between the second quarter and fourth quarter in 2022.

Following an earlier announcement indicating completion of the first phase of the Te Giac Trang (TGT) infill drilling campaign offshore Vietnam, Pharos Energy, one of the co-owners of the Hoang Long JOC, has updated that the fourth well in the programme has been brought on stream at an initial rate of 2,200 bopd. Also, the drilling programme was completed circa $20 million below the JV gross budget, in line with capex guidance. Further, the Hoang Long Operating Company Management Committee approved two additional TGT wells and 13 well interventions in the budget for 2022, with the two wells being planned to be drilled in the third quarter of 2022. PV Drilling owned jackup PV Drilling II was engaged in the first phase of the drilling campaign and has been released off contract.

Deltic Energy has announced that the 3D seismic survey over UK offshore Licence P2428 and surrounding areas offshore UK has been completed. The seismic vessel will be demobilised, and results of the survey are expected to be delivered in second quarter of 2022. As per Deltic’s farm-out agreement with Cairn Energy, Cairn is responsible for 100% of the costs of the seismic acquisition, processing, and associated work programmes up to the point at which a positive well investment decision is made. The Chief Executive of Deltic Energy has remarked that the results of the seismic survey would enhance understanding on the multiple gas prospects on the licence and would be key to de-risking future drilling.

EOG has completed the acquisition of Block WA-488-P offshore Northern Australia, which contains the large shallow-water Beehive oil prospect. The block was sold to EOG by Melbana Energy earlier this year for an initial purchase price of $7.5 million. As per Melbana, the Beehive prospect contains 416 million barrels of oil equivalent on a best estimate basis. EOG has already applied for regulatory approval relating to geophysical and geotechnical investigations in the prospect, which would help in understanding the best location for a jackup. The geophysical work is planned between April and August of 2022, and EOG plans to drill the exploration well ideally before the second quarter of 2023.

Mobilisation

Mid-water semisub Stena Don has commenced mobillisation from Scapa Flow, in the UK Orkney Islands, to Morocco ahead of a new drilling campaign for Chariot Oil. Drilling under the new planned one-well exploration drill is expected to begin in December. 

Ultra-deepwater drillship Maersk Voyager has now moved from Angolan waters to Walvis Bay, Namibia, ahead of imminently spudding the Venus-1 wildcat well for TotalEnergies. 

Newbuilds and rig sales

Saipem announced the delivery of the new 7th gen. drillship Samsung Santorini (Ex Ocean Santorini) of Geoje, South Korea. The drillship was originally ordered by Ocean Rig, but the order was cancelled by Transocean in 2019 after the company acquired Ocean Rig. Just this summer, Saipem signed a bareboat charter for the modern drillship with Samsung Heavy Industries (SHI). After delivery, the drillship is expected to mobilise to the US Gulf of Mexico, where Saipem has contracted the drillship to ENI. The contract with SHI also includes a purchase option. Though the purchase price is unknown, it is expected to be in the range of West Cobalt.

Financial 

For the third quarter of 2021, Odfjell Drilling reported operating revenue of $227 million compared to $210 million in Q3 2020. Meanwhile the driller recorded an EBITDA of $88 million compared to $87 million in Q3 2020 and an EBITDA margin of 39% compared to an EBITDA margin of 41% in Q3 2020. The Group’s contract backlog is currently $2.3 billion, whereof $1.3 billion is firm backlog and the comparable figure at the end of Q3 2020 was $2.6 billion, whereof $1.4 billion was firm backlog. Meanwhile, operating revenue for the MODU segment in Q3 2021 was $153 million ($151 million), an increase of $2 million. This is explained by higher revenue for Deepsea Aberdeen and Deepsea Nordkapp due to idle rate for BP and lower dayrate in Q3 2020, respectively, partly offset by reduced revenue for Deepsea Stavanger and Deepsea Atlantic compared with Q3 2020. EBITDA for the MODU segment in Q3 2021 was $78 million ($76 million), an increase of $2 million for the same reasons as mentioned above. EBIT for the MODU segment in Q3 2021 was $41 million ($36 million), an increase of $5 million.

Other news 

Mozambique has launched its 6th licensing round for the concession of hydrocarbon exploration and production areas. Sixteen new areas have been defined, distributed in four distinct regions, five of which are located in the Rovuma Basin, seven in Angoche, two in the Zambezi Delta and two in Save, totalling more than 92,000 sq km. This tender, which has a term of approx. 10 months, from the launch date until the results are announced in October 2022, comes about three months after the approval of the new Strategy of Concession of Areas for Exploration and Production of Hydrocarbons, which provides the basis for ensuring continuous and systematic exploration of hydrocarbons in the Mozambique and Rovuma basins, promoting national and foreign investment, as well as reducing the time between the holding of public tenders for the concession of areas to 2 years, as opposed to 3 years under previous legislation.

Petrobras has outlined investment plans of $68 billion in its Strategic Plan 2022-26, which increased by approx. 24% compared to the previous plan for the period 2021-25. Of the total capex allocation, 84% ($57.3 billion) has been earmarked for E&P. The company has indicated a strategy of maximising portfolio value through focus on exploration in deep and ultra-deep waters. 67% of the E&P capex would be directed towards pre-salt fields including Buzios, Tupi, Mero, Itapu, Jubarte, Sepia, Atapu, Berbigao, Sururu, Sapinhoa and its working interest in Block BM-C-33. The rest would be allocated towards post-salt developments such as Marlim, Marlim Sul / Marlim Leste, Roncador, Barracuda-Caratinga, and the Sergipe Deep Waters (SEAP). About $5.5 billion of the upstream capex will be used for exploration activity, with 58% of the total directed towards the Southeast basins (Campos, Santos and Espirito Santo), and another 38% to the equatorial margin. Petrobras expects oil output to increase from 2.1 million bpd in 2022 to 2.6 million bpd in 2026, and pre-salt production will continue to represent most of the company’s output, increasing from 70% of total output in 2022 to 79% in 2026. The company is also setting aside $2.8 billion to decarbonise operations, invest in bioproducts and in the diversification of its renewables business.

KeyFacts Energy Industry Directory: Esgian

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