Petrobras will resume a process for a licence to drill a controversial exploratory well near the mouth of the Amazon river after Brazil’s environmental agency, Institute of Environment and Renewable Natural Resources (IBAMA) denied the state-run oil major an environmental licence
IBAMA denied Petrobras the licence to drill Morpho 1-APS-57 in block FZA-M-059 citing environmental risks, discrepancies in environmental studies and inadequate measures for communicating with indigenous communities in the area.
Petrobras chief executive Jean Paul Prates has confirmed the state-run oil major will appeal the regulator’s decision.
Located in the deep waters of Amapá, offshore Brazil, the area known as the Brazilian Equatorial Margin is thought to hold nearly 5Bn barrels worth of oil as it has similar geology to neighbouring Guyana, where ExxonMobil has discovered a rich pool of hydrocarbons. An oil rig has been in place since early December 2022 awaiting approval to drill the exploratory well.
This potential new frontier would complement and eventually come to replace Brazil’s prolific pre-salt fields which drive Petrobras’ revenues and account for more than 75% of the company’s production.
IBAMA’s decision to block the permit has caused a rift in President Luiz Inacio Lula da Silva’s camp between those seeking to prioritise protecting the environment and the need to drive economic growth.
Speaking at the G7 last week, President Lula himself commented, “If exploring this oil poses a problem for the Amazon, it certainly won’t be explored, but I find it difficult because it is 530 km away from the Amazon.”
Stena Drilling has inked a new five-year contract with Shell Offshore for the drillship Stena Evolution. Stena Evolution will commence work in the US Gulf of Mexico Q2 2024 with an option to extend the contract at the end of the five-year primary term. The financial details were not disclosed.
Ocean Rig (now a Transocean subsidiary) ordered Ocean Rig Crete, as Stena Evolution was formerly known, at Samsung Heavy Industries back in 2014. Transocean subsequently cancelled the order in 2019. In December 2021, Stena Drilling entered a purchase option agreement with Samsung Heavy Industries.
Norwegian North Sea sees more action
The Norwegian Petroleum Directorate has granted Aker BP a drilling permit for a wildcat well 30/11-15 in production licence 035. Odfjell Drilling’s semi-submersible Deepsea Stavanger is expected to drill the well in June.
In southwest Africa, a Shell subsidiary has extended the term of Deepsea Bollsta’s contract. The Northern Ocean jack-up is currently employed in Namibia, and the rig operator has a announced a six-month extension of the unit’s firm term from December 2023 to June 2024, with an additional option for six months. The extension from December provides revenue backlog of approximately US$89M, with the option to extend for an additional six months, potentially adding a further US$81M.
Northern Ocean’s other jack-up, Deepsea Mira, is also expected in Namibia ahead of a multi-country contract with TotalEnergies. The rig departed from Bergen, Norway, at the beginning of April and began mobilisation to the first well location in Namibia but has experienced some delays loading equipment and performing required maintenance during the transit. Northern Ocean plans to begin the contract at the end of Q2 2023.
The Norwegian oil producer has also reported a new discovery in the Yggdrasil area of the Norwegian North Sea. Aker is nearing completion drilling the Øst Frigg Beta/Epsilon exploration well in the area and its preliminary estimates peg the recoverable volume at about 40~90M barrels of oil equivalent (mmboe), surpassing the previously estimated volumes of 18-45 mmboe. The discovery is located within production licences 873 and 442 where Aker BP serves as operator.
A Plan for Development and Operations was submitted to Norway’s Ministry of Petroleum and Energy on 16 December, 2022 with production scheduled to commence in 2027.
Odfjell Drilling and Equinor reported a successful pilot project where the Deepsea Atlantic rig operated using biofuel last year. According to Odfjell’s Sustainability Report for 2022, the rig operated an engine successfully on hydrotreated vegetable oil, produced from waste oil, for two months and conducted gaseous emissions measurements. However, Equinor said further implementation of biofuel in its fleet is pending on the availability and cost of biofuel.
And this week, 1,600 offshore workers, members of UK labour union Unite, from five companies, will begin two rounds of 48-hour strike action, first from 1-3 June and again from 8-10 June. Affected oil and gas operators include Apache, BP, Enquest, Harbour Energy, Ithaca, Repsol, Shell and TAQA. This round of strike action follows previous rounds in April and May and Unite’s announcement that around 600 Bilfinger contractors on Ithaca, CNRI and TAQA assets had rejected new pay offers.
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