Denmark plans to allot nearly US$4Bn into carbon capture and storage projects; Seatrium New Energy has delivered a second Borr Drilling jack-up to ADNOC Drilling
Denmark’s climate and energy ministry has outlined a structure for upcoming carbon capture tenders totalling Dkr26.8Bn (US$3.9Bn).
In May, Denmark awarded Dkr8.0Bn (US$1.2Bn) to Orsted to capture and store 0.4M tonnes of CO2 per year from two heat and power plants over a 20-year period.
Rather than dispersing the funds into smaller portions, the proposal consolidates these amounts into two substantial tranches. The next tender for storage of 0.9M tonnes per annum (mta) of CO2 is set for June 2024 and is worth Dkr10.5Bn (US$1.5Bn), and a tender in 2025 to capture and store 1.4 mta of CO2 is worth Dkr16.3Bn (US$2.4Bn).
The Danish ministry believes this will allow more actors to bid, creating greater certainty that carbon capture and storage can deliver its share of the country’s CO2 reduction targets. Authorities are reportedly also demanding these projects become fully operational as early as 2029, moving the target date ahead by one year, from 2030.
TotalEnergies has agreed to acquire a 40% stake in the Luna CO2 storage project following an agreement with a subsidiary of CapeOmega, a Norwegian company that was a developer in storage exploration licence ExL004.
Located 120 km offshore Bergen in 200 m water depth, ExL004 covers an area of 453 km2 and is adjacent to the license where the Northern Lights carbon storage project is under development, with a first phase due to start in 2024. Wintershall Dea Norge serves as operator of ExL004 with a 60% participating interest.
Total also holds a 33% participatory interest in Northern Lights.
In rigs and contracts news, Seatrium New Energy (formerly Keppel FELS) has delivered a second Borr Drilling jack-up to ADNOC Drilling.
KFELS B Class AlSila is part of a series of five rigs Seatrium is building for drilling contractor Borr Drilling. The unit can operate in water depths of more than 122 m, with the ability to drill to depths of up to 9,150 m and drill deep wells both vertically and horizontally.
Last year, Seatrium agreed to accelerate the delivery of three jack-ups to either Borr Drilling or a third party. The construction contracts for the three rigs have since been novated by Borr Drilling to ADNOC Drilling.
Borr is looking to expedite delivery of two of those rigs under construction in Singapore. The Tor Olav Trøim-controlled outfit is reportedly in talks with Seatrium to have newbuilds Vale and Var ready by August and November 2024, respectively.
The unit Arabia III has undergone uprade work and has been reactivated by Abu Dhabi’s Ocean Oilfield Integrated Solutions ahead of its contract in December 2022. The five-year deal for work in the Middle East comes with extension options and is worth an estimated US$282M. The six-month reactivation and Schedule G upgrade project took place at Hamriyah Sharjah in the UAE.
All of Borr Drilling’s 22 delivered rigs are contracted or have future commitments, with about 60% of units in southeast Asia and Mexico. The fleet’s contract coverage for 2024 stands at 70%, including firm contracts and priced options, with an average equivalent day rate of approximately US$123,000.
As Riviera has reported, rig utilisation has risen this year, driving day rates to their highest in years, and contractors, including Borr, believe the market will continue to remain attractive for both drillships and jack-ups.
In the company’s earnings call for Q2, Borr pointed out that market utilisation for modern rigs currently stands at 93.9%, “a level not seen since 2014.”
A new player in the offshore rig market, ElDorado Drilling, has enlisted Norwegian bank SpareBank 1 Markets in raising US$130M to fund two rigs.
Earlier in 2023, ElDorado acquired two ultra-deepwater drillships, Dorado and Pacific Zonda, from South Korea’s Samsung Heavy Industries for delivery in 2024. Dorado was ordered by Seadrill at SHI in 2013 and subsequently stranded after the order was cancelled. Pacific Zonda, capable of drilling to up to 3,050 m, is under construction. In a social media post, SpareBank revealed that ElDorado is also considering applying part of the net proceeds to acquire a third drilling unit.
Equinor has reported a new oil discovery in the Troll/Fram area in the northern North Sea. Odfjell Drilling’s Deepsea Stavanger drilled an exploration well about 4 km west of the Fram field. This is the ninth successful well in this area in 12 attempts since 2019, and the discovery consists of mostly oil but also some gas reserves. Equinor pegs the volumes at between 9M and 35M barrels of oil equivalent.
Diamond Offshore’s semi-submersible Ocean Apex has commenced a two-well drilling campaign for Woodside Energy in Australia. Ocean Apex recently underwent a five-year special periodic survey at the Seatrium shipyard in Singapore and was mobilised to Australia. The rig will work on a series of drilling jobs down under, keeping it employed until Q1 2025. When the Woodside contract concludes in October, Ocean Apex will begin a new assignment for Inpex through next July and subsequently begin work for Santos and Chevron into 2025.
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