Rigs report: Oil perks up, but House bill would ban leasing in OCS

While Covid-19 cases have been spiking globally, threatening further countrywide lockdowns to halt the spread of the resurgent virus, market sentiment has been buoyed by optimism over successful preliminary trials of two vaccines. Both Covid-19 vaccines, one from Pfizer and the other from Moderna, have proved more than 90% effective in trials in preventing the disease. Distribution of an initial 20M doses of the vaccine could come as soon as the end of the year. If such vaccines prove successful, there is hope that world economies will begin to stabilise, air, road and rail travel will increase, and manufacturing will rebound, creating increased demands for energy.

In assessing the impact of Covid-19 on energy, the International Energy Agency said bringing the pandemic under control in 2021 would allow energy demand to return to pre-crisis levels by 2023. A longer pandemic would usher in the slowest decade of energy demand growth for a century.

Globally, offshore jack-up rig activity slipped week-on-week to 319 contracted units, while floater activity stalled at 105 units during week 47 2020, according to Westwood Global Energy’s RigLogix.

Highlighting recent floater activity in southeast Asia, Maersk Drilling’s 7th-generation drillship Maersk Viking was secured by Brunei Shell Petroleum Company (BSP) under an option worth US$7.1M for exploration drilling of one deepwater well. The contract extension has an estimated duration of 35 days, with work expected to commence in May 2021 in direct continuation of the rig’s previously agreed work scope. About a week earlier, BSP had contracted Maersk Viking to drill one deepwater exploration well offshore Brunei Darussalam starting in March 2021. The firm 35-day contract, valued at US$9M, includes additional services provided and a mobilisation fee. Maersk Viking will be mobilised out of warm stack in Johor, Malaysia.

On behalf of the partners ExxonMobil and Petrogal Brasil, Equinor as operator awarded contracts valued at US$455M to Baker Hughes, Halliburton and Schlumberger for drilling and well services on the Bacalhau field in Brazil. The contracts have a firm period of four years and two two-year options.

“Brazil is a core area for Equinor, and Bacalhau is an important asset in the Brazilian pre-salt Santos area,” said Equinor acting senior vice president for project development Trond Bokn. FID on the project is planned in 2021.

Earlier this year, the partnership entered into front end engineering and design contracts with early commitments and pre-investments for the Bacalhau field with MODEC for FPSO and Subsea Integration Alliance for SURF. The awards have an option for the execution phase under a lump-sum turnkey contract setup which includes engineering, procurement, construction and installation for the entire SURF and FPSO scopes.

Partners in Bacalhau are Equinor with a 40% stake, ExxonMobil, with 40%, Petrogal Brasil 20% and non-investor government agency Pré-sal Petróleo SA.