Soumya Mutsuddi, Esgian

This week Transocean, Valaris, Stena Drilling, and Shelf Drilling announced new contracts and/or work extensions for their rigs. Meanwhile, drillship Capella commenced drilling Repsol's Rencong-1X exploration well off Indonesia.

Contracts

Shelf Drilling was awarded a three-year contract by ONGC for jackup C.E. Thornton involving operations at Mumbai High off India. The rig is currently contracted to the operator until end 2022 and the new charter is planned to start in Q2 2023. The award relates to a 6-jackup requirement released by ONGC earlier this year, involving four rigs of MLT/BMC design and two of F&GL design. 

Harsh-environment semisub Stena Don secured a firm one-year charter with Shell off UK. The contract is expected to commence in Q2 2023, with an additional one-year option attached to the charter. The work includes a combination of P&A and development drilling. The rig is currently engaged with Repsol off UK and has forthcoming engagements lined up with i3 Energy and Tailwind/Petrofac with pending options. 

Aban Offshore received a letter of award from ONGC for jackup Aban III involving operations off India. The contract is for a firm period of three years and is expected to commence in Q1 2023. The rig is presently working for ONGC off India and is expected to conclude its current engagement during October 2022. The award relates to a 6-jackup requirement released by ONGC earlier this year, involving four rigs of MLT/BMC design and two of F&GL design.

Transocean announced that the ultra-deepwater drillship Petrobras 10000 secured a 5.8-year contract off Brazil with a national oil company, adding an estimated $915 million in backlog. The contract is expected to commence in October 2023 and end in August 2029. The company added that the estimated firm backlog excludes income associated with the customer’s anticipated use of the company’s patented dual-activity technology on the Petrobras 10000.Transocean also announced that the ultra-deepwater drillship Deepwater Conqueror was awarded a two-year contract by a ‘major operator’ for work in the US GOM at $440,000 per day, with up to an incremental $39,000 per day for additional products and services. The contract adds an estimated $321 million in backlog, excluding revenue associated with the additional products and services. The work is expected to begin in December 2022 in direct continuation of the rig’s current contract. The rig is currently working for Chevron in the US GOM with the firm work running into November 2022. 

Valaris reported new contracts and extensions for multiple rigs in its latest fleet status report. For floaters, the contractor received an exercised option for six months involving drillship Valaris DS-10 from Shell off Nigeria. The option will be in direct continuation of the existing firm programme, which will keep the rig busy until April 2023. For the jackup fleet, Valaris confirmed a three-year bareboat agreement with ARO Drilling for Valaris 141 starting in August 2022. The contractor also secured an extension for Valaris 106 from bp off Indonesia involving four wells. The estimated duration is 360 days, starting in direct continuation of the firm term. The contract also has eight options, each with an estimated duration of 90 days. In the US GOM, jackup Valaris 144 received a one-well contract from Talos Energy. The job has a minimum duration of 30 days with commencement expected in Q4 2022. It will be followed by a 90-day charter with Cantium, which is expected to keep the rig busy into at least February 2023, as Cantium also has two 90-day options. Offshore Australia, jackup Valaris 107 had a one-well option exercised by an undisclosed operator for a duration of 31 days. This assignment will be followed by engagements with Eni and GB Energy, which are expected to keep the rig working into January 2023.

Drilling and discoveries

Eni announced a second gas discovery in the first exploration well drilled in Abu Dhabi’s Offshore Block 2 Exploration Concession. The discovery from a new deeper reservoir indicates between 1–1.5 trillion standard cubic feet (tscf) of raw gas in place. This builds on the initial finding in February 2022 from a shallower target, taking the total amount of gas in place from this single well to 2.5-3.5tscf. 

Neptune Energy announced commencement of drilling at the Ofelia exploration well in its operated licence PL929 off Norway. Drilling of well 35/6-3 S is being undertaken by harsh environment semisub Deepsea Yantai. Neptune informed that in case of a commercial discovery, the Ofelia prospect could be tied back to its operated Gjøa platform and could potentially be developed in parallel with its Hamlet discovery, announced earlier this year. 

Wintershall concluded the drilling of wildcat well 31/4-A-13 C in its operated production licence 055 off Norway. The well was found to be dry with no traces of petroleum and will be permanently plugged and abandoned. Drilling is understood to have been undertaken by the harsh environment semisub Scarabeo 8. 

Repsol spudded the Rencong-1X exploration well in the Andaman III Working Area, offshore Aceh, Indonesia. The well is located in water depths of about 1,100m and drilling is expected to last for around 66 days. Drilling is being carried out by the ultra-deepwater drillship Capella, which had earlier completed the drilling of Harbour Energy’s Timpan-1 exploration well, also off Indonesia.  

Jackup GSP Uranus finished its campaign with Black Sea Oil & Gas off Romania and is undergoing preparations for its next charter. Following certification and routine maintenance, the rig will transit to Turkiye for a seven-well charter with Trillion Energy at the South Akcakoca Sub-Basin (SASB) gas field. Operations are expected to begin during August 2022 and likely to run until around May 2023.

Equinor received regulatory consent to drill exploration wells 31/1-3 A, 31/1-3 S and 31/1-3-U-1 in the Røver Sør prospect (licence 923) off Norway. Drilling would be undertaken by the harsh-environment and ultra-deepwater semisub Transocean Spitsbergen. 

JV partner Longboat Energy announced commencement of drilling at the OMV Norge-operated Oswig exploration well 30/5-4 S (licence PL1100) off Norway. Drilling is being undertaken by the harsh environment jackup Maersk Intrepid and the well is expected to take up to seven weeks to drill. 

CNOOC made an oil and gas discovery at a shale exploration well in the Beibuwan Basin in South China Sea. The well called Weiye-1 is understood to be China’s first successfully drilled offshore shale oil exploration well. The well tested daily production of 20 cubic meters of oil and 1,589 cubic meters of natural gas, as per CNOOC. The Beibuwan Basin is understood to hold around 1.2 billion metric tons of prospective shale oil resources, offering prospects for future exploration.

JV partner Horizon Oil announced commencement of workover and drilling operations in the WZ6-12 area of CNOOC-operated Block 22/12 in the Beibu Gulf off China. Following completion of the WZ12-8E drilling campaign, jackup COSLStrike has been mobilised to the WZ6-12 wellhead platform. The campiagn includes a five well workover programme designed to reinstate / enhance production from existing WZ6-12 wells, in addition to drilling of the WZ6-12 M3 appraisal well. The JV is also considering adding a WZ6-12 North field development infill well towards the end of the programme, for which a final decision will be made in the coming weeks. The programme is expected to conclude towards the end of September 2022.

Demand

Equinor received regulatory consent to drill wildcat well 6507/8-11 S in its operated production licence 124 off Norway. Drilling would be undertaken by the harsh-environment semisub Deepsea Stavanger during September 2022. 

JV partner Horizon Oil informed that the drilling of exploration well WZ12-8E A8 off China has been concluded. The well failed to encounter any hydrocarbons and was plugged and abandoned. Drilling was undertaken by jackup COSLStrike, which concluded operations on the WZ12-8E Phase 1 drilling programme. Horizon added that there is possibility of a Phase 2 development well being drilled at the WZ12-8E platform.

Australia’s Department of Industry, Science, and Resources notified that it has opened registration for a webinar to launch the country’s 2022 Offshore Petroleum Acreage Release. This is part of the Australian government’s policy of releasing offshore acreage every year to boost oil and gas exploration. The webinar will be streamed on 24th August 2022 and explorers and investors from Australia and overseas have been invited to attend. During the webinar, the Minister of Resources will announce the areas available for bidding, following which the Department will publish all release area information on its website. 

Mobilisation / Upgrades

Semisub SSV Catarina mobilised to the Jangkrik field off Indonesia to commence an engagement with Eni. The contract involves one firm well and a one-well option. Earlier this year, Esgian reported that the semisub was sold to a group of Norwegian investors, with Petroserv continuing to maintain commercial management for the rig.

Financials

Transocean reported contract drilling revenues worth $692 million for Q2 2022, increasing from $586 million in Q1 2022. The company’s net loss attributable to controlling interest was $68 million during the period compared to a net loss of $175 million reported in the previous quarter. Adjusted EBITDA for the period increased to $245 million from $163 million in Q1 2022. Transocean’s contract backlog was reported at $6.2 billion as of its July 2022 Fleet Status Report. 

Valaris reported revenue of $413 million for Q2 2022, increasing from $318 million reported in Q1 2022. The increase was primarily due to a $51 million fee related to the termination of a contract for drillship Valaris DS-11, as well as higher utilization and average day rates for both the floater and jackup fleets. The company’s net income for the period was $113 million compared to a net loss of $40 million reported in Q1 2022. Adjusted EBITDA for the period increased to $29 million from a negative $31 million in the previous quarter.

Other News

TotalEnergies took a final investment decision (FID) on the Begonia oil field in Block 17/06 off Angola. The Begonia development consists of five wells tied back to the Pazflor FPSO, which is already in operation on Block 17. Commissioning is expected in late 2024 with the project expected to add 30,000 barrels per day to the FPSO's production. Begonia was discovered in 2010. 

KeyFacts Energy Industry Directory: Esgian