While not quite starting off with a bang, 2021 did strike a positive note for the global offshore jack-up fleet, registering modest gains week-on-week in drilling activity the North Sea, southeast Asia and the Middle East
Westwood Global Energy’s RigLogix reported there were 326 offshore jack-up rigs active in week 1 2021, with the North Sea, southeast Asia and the Middle East all rising by one unit week-on-week.
Activity in deep water showed there were 107 drill ships, semi-submersibles and other floaters contracted for the week, down one unit from the last week of 2020.
Brent crude oil futures were trading at US$51.12 per barrel on 31 December, down US$0.17 from a week earlier.
While it was heartening to see Brent crude oil trade above US$50 per barrel in the last month of 2020, it still sits 25% below levels seen at the start of the year. On the final day of 2019, Brent crude closed at US$67.77 per barrel.
Maintaining price levels of US$50 per barrel in 2021 will be critical for covering capital expenditures and shareholder pay outs of the five supermajors – Shell, BP, Total, ExxonMobil and Chevron – according to an analysis by Westwood Global Energy.
Westwood Global Energy said the supermajor group announced capex cuts of about US$10Bn for 2021 (relative to 2020). The energy analysts said this saving, alongside cuts to BP and Shell’s dividend, reduces the oil price required for operating cash flow to cover capital expenditures and shareholder pay-outs in 2021 to about US$48/bbl.
Jack-up activity in the North Sea
Among the recent jack-up activity in the southeastern part of the Norwegian North Sea was the installation of Maersk Inspirer at the Yme field on 31 December. As a result of the installation, the project now moves into the hook-up and commissioning stage, reported Yme field operator Repsol Norge.
Repsol Norge expects first oil from the Yme field in H2 2021.
Maersk Inspirer was modified at Aker Solutions’ yard in Egersund to serve in its role as a drilling and production unit.
Operator of the Yme field and the Yme New Development Project, Repsol Norge holds a 55% working interest. The remaining interest in the Yme licence is held by Lotos Exploration and Production Norge (20%), KUFPEC Norway (10% stake) and OKEA (15%).
Pandion acquires interests in licences
Under an agreement with Wintershall DEA Norge, Oslo-based Pandion Energy will acquire stakes in two Norwegian North Sea licences. Subject to approvals, the deal would see Pandion acquire a 15% interest in PL 617 and raise its stake in PL 820 S by 2.5% to 12.5%.
In March, Pandion Energy reported the results from exploration drilling in PL 820 S. Wells 25/8-19 S and 25/8-19 A proved hydrocarbons at five different intervals with the Iving discovery in the Skagerrak Formation being the most prominent with recoverable resources estimated to between 12M and 71M barrels of oil equivalent. Operator MOL Norge, with partners Lundin Energy Norway, Pandion and Wintershall and Wintershall DEA plan an appraisal drilling campaign in 2021. The licence is located in blocks 25/7 & 8, north-northwest of the Balder and Ringhorne fields.
Meanwhile, PL 617 contains the Eidsvoll prospect and is located in block 2/9, east-northeast of the Valhall and Hod fields where Pandion Energy holds a 10% interest. Operator MOL Norge is planning to drill the Eidsvoll exploration well in 2021 together with partners OMV (Norge) and Wintershall DEA. MOL Norge has secured the low-emissions jack-up rig Maersk Integrator.
Santos takes FID on Bayu-Undan
The jack-up rig Noble Tom Prosser will begin drilling in Q2 2021 supporting the Phase 3C infill drilling programme at the Bayu-Undan field in the Timor Sea, offshore Timor-Leste. The US$235M drilling programme follows an FID by Australian energy producer Santos.
Santos said the drilling programme will comprise two platform production wells and one subsea production well, developing additional natural gas and liquids reserves, extending field life and production from the offshore facilities and the Darwin LNG plant.
Production from the first well is expected in Q3 2021.
Riviera Maritime Media will hold a series of 45-minute webinars during Offshore Webinar week commencing 19 January 2021. Sign up to attend here