Global offshore jack-up and floater activity slipped for the third consecutive week as fresh concerns over a second wave of coronavirus weighed on Brent crude oil pricing
Brent crude oil closed at US$41.52 on 29 June, down US$1.02 or slightly over 2% from 22 June.
Globally, in week 27 of 2020 there were 325 offshore jack-up rigs actively drilling and 108 floaters, according to energy analysts Westwood Global Energy Group. Week-on-week, actively drilling jack-ups were down by four from 329 and floaters by three from 111.
In the Middle East, jack-up drilling activity fell from 120 to 118 active offshore jack-up rigs as oil and gas operators continued to adjust their drilling programmes as flagged up in last week’s Rig report.
Singapore-listed Mermaid Maritime Public Company Limited reported that jack-up drilling rig AOD II, owned by its associate Asia Offshore Drilling Limited (AOD), has temporarily suspended operations in the Middle East. Mermaid Maritime said this was a result of a notice of suspension from “a reputable national oil and gas operator and shall be for a period of up to 12 months.” That reputable national oil and gas operator is Saudi Aramco.
The suspension was due to the impact of crude oil price volatility affecting the oil and gas industry and offshore drilling services sector.
Mermaid Maritime said the customer has the right to recall the rig back to work at any time during the suspension period.
AOD had earlier secured a three-year contract extension for AOD II commencing on 15 April 2020. This suspension, which had commenced upon completion of the last well in progress, is at a zero-day rate and will automatically extend the term of the contract for a period equal to the suspension.
Mermaid Maritime has a 33.76% equity stake in AOD, with the remaining majority interest owned by a subsidiary of Seadrill Limited.
According to Seadrill’s most recent fleet status report, AOD II was under contract to Saudi Aramco from April 2020 to April 2023 at a day rate of US$89,900. Also under contract to Saudi Aramco are AOD I until June 2022 at a day rate of US$75,000 and AOD III until December 2022 at a day rate of US$92,900. All three AOD jack-up rigs can operate in 122 m water depth, drilling to a depth of 6,000 m.
Common shares in Seadrill have begun trading on the OTCQX market following a transition and delisting from the NYSE. Seadrill’s primary listing is on the Oslo Børs.