ADNOC adds two high-specification Gusto MSC CJ46-design jack-ups and Brazil’s national oil company considers its next moves after its Amazon-adjacent exploration plans are blocked
ADNOC Drilling continues to expand its offshore fleet, signing a deal this week for two high-specification Gusto MSC CJ46-design jack-ups. The combined rig acquisition cost stands at US$220M, and the move complements parent company ADNOC’s expansion and growth strategy, as it eyes expanding production capacity to meet the growing global energy demand.
The two rigs will be delivered into Abu Dhabi waters and become operational Q4 2023 with revenue contribution to begin in 2024, by which time ADNOC Drilling aims to have 142 owned rigs service-ready, in line with its fast-tracked fleet expansion programme.
Supplementary infrastructure is being planned, as well, for ongoing service to ADNOC’s enlarged fleet, according to an announcement from another UAE company. This month, Abu Dhabi-based AD Ports Group inked a 25-year agreement with Singapore-based Crystal Offshore, a logistics provider to the marine and offshore industry, to build an offshore rig and vessel repair base in the emirate’s Khalifa Port.
A total footprint of 20,000 m2 and an associated quay wall in Khalifa Port are being earmarked for Crystal Offshore to build its base, which will include office facilities and fabrication workshops to provide advanced repairs and refits to jack-up rigs, FPSOs and semi-submersibles.
Petrobras eyes new horizons
After Brazilian regulators turned down Petrobras’ application for a drilling permit in a new exploratory zone near the mouth of the Amazon river, Petrobras is looking to shore up its ability to retain proven domestic reserves of 8.9 Bn barrels. The company is increasingly reliant on its mammoth pre-salt fields, which account for over 75% of Petrobras’ oil production, but production from those fields reportedly could peak by the end of the decade.
To continue to replenish its reserves, Petrobras is eyeing the Brazilian Equatorial Margin – a territory with deepwater reserves estimated to hold nearly 5Bn barrels worth of oil. The estimate is, in part based on ExxonMobil’s significant discoveries in an area with similar geology in neighbouring Guyana and Suriname.
Petrobras had earmarked half of the US$6Bn in investments planned for new discoveries by 2027 to the region, according to an editorial in Brazilian daily O Estado de S Paulo. The Estado article reports a drilling rig was sailing towards the Campos Basin, with helicopters and support boats also en-route for the Equatorial Margin in a show of the state-run oil major’s confidence in the territory’s promise.
Still, the Brazilian state regulator IBAMA’s denial of a drilling permit for block FZA-M-59 in the Foz do Amazonas basin has left its mark on future drilling plans within Brazil, and Petrobras, like many oil giants, will enter the first stages of an energy transition before the end of this decade. The company’s latest SEC filing states it is targeting between 6% and 15% of total capex for low-carbon projects between 2024 and 2028.
With these restrictions in mind, Petrobras has shown it is keen to keep exploring elsewhere in South America. Guyana is holding an auction for 14 offshore blocks next month and Petrobras is among those considering a bid, and next year, Petrobras plans to drill two new wells offshore Colombia – part of a large natural gas discovery in the Tayrona block.
In late May, Brazil also played host to several neighbouring countries to discuss, among other issues, the energy transition and the future of hydrocarbon production. During the talks, Petrobras chief executive Jean Paul Prates reportedly met Bolivian President Luis Arce and told media, “We want to revisit neighbouring countries such as Bolivia, Venezuela and Guyana and discuss some points including contractual terms, new potential for oil and gas exploration and the preparation of companies for the energy transition.”
However, Petrobras, TotalEnergies, QatarEnergy and Petronas have more recently announced the signing of a production sharing contract for the 1,300-km2 Agua Marinha exploration block in the pre-salt Campos Basin. And as of 6 June, the FPSO Almirante Barroso at the pre-salt Buzios oilfield has commenced production, with the FPSO locked to a 21-year time charter contract with Petrobras. Further, Brazilian President Lula da Silva’s recent appointee to head Petrobras’ energy transition, Mauricio Tolmasquim, stressed that the company will most likely need to ramp up petroleum production to pay for costs related to the energy transition. So at least in the near term, local exploration for hydrocarbons seems likely to continue to dominate Petrobras’ plans.
New contracts
In Norway, Odfjell Drilling announced, on behalf of CIMC Offshore, two deals for the drilling rig Deepsea Yantai. The first contract with DNO Norge includes drilling one firm well, in PL 1182 in the North Sea. The firm scope of work is estimated to take 35 days and will commence early Q3 2024.
Deepsea Yantai will then work for ConocoPhillips Skandinavia for another firm one-well campaign, with options for two further wells, in PL 891 in the Norwegian Sea. The firm scope of work is estimated at 72 days and will commence Q3 2024. Odfjell said the two deals extend Deepsea Yantai’s backlog into Q4 2024.
Malaysian offshore drilling firm Velesto Drilling received the letter of award from Vestigo Petroleum for the provision of its jack-up drilling rig NAGA 2, valued at an estimated US$10.9M.
Vestigo, a Petronas subsidiary, is expected to drill five firm wells beginning Q4 2023.
NAGA 2 is a premium independent-leg cantilever jack-up rig with a drilling depth capability of 9,144 m and a rated operating water depth of 107 m.
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