Global offshore drilling activity remained relatively stable for week 31 2021, with jack-up activity pushing up the total contracted fleet by one unit week-on-week
Overall, there were 345 offshore jack-up rigs contracted – highlighted by 29 units in the North Sea, 31 in southeast Asia and 118 in the Middle East. The floater market, meanwhile, remained unchanged week-on-week at 115 units contracted globally, although drilling in West Africa is at double the levels – 10 units to just 5 – it was year-on-year.
Big board-listed Noble Corp, which emerged from Chapter 11 bankruptcy in February, reported a slight increase in quarter-on-quarter revenue “largely due to contract commencements” for Noble Tom Prosser, Noble Hans Deul, and Noble Clyde Boudreaux; higher operating days on Noble Sam Turner and Noble Scott Marks; and the addition of Pacific Santa Ana and Pacific Sharav to its fleet in April, said the contractor.
The Americas, in particular, has been a favoured region for the offshore drilling contractor’s floaters. The drill ship Noble Sam Croft began drilling in Guyana for ExxonMobil – joining three other company drilling units in the region. Pacific Sharav commenced its contract with Murphy in the US Gulf of Mexico, with a firm term into Q3 2022. Pacific Khamsin is preparing to begin operations in August for Petronas in Mexico and will follow on to a recently signed contract with Murphy for an estimated 83 days of work to begin in November 2021 in the Gulf of Mexico. The rig will then move in direct continuation to the previously announced contract with EnVen.
In July, Pacific Santa Ana signed a contract with APA Corp in Suriname for one firm well plus two option wells commencing in early February 2022.
Noble president and chief executive Robert Eifler was encouraged by the contracts won by the firm in the first half of 2021, saying, “we have seen a building pipeline of floater tender opportunities.” Mr Eifler added that Noble was targeting several new opportunities for its drill ships. “We do not believe the recent volatility in commodity prices has changed our customer’s offshore rig demand, especially for the most capable rigs, and we maintain our constructive outlook for ultra-deepwater floaters and stable outlook for jack-ups,” he said.
To Mr Eifler’s point regarding volatility, Brent crude oil (ICE) was trading at US$72.89 per barrel on 2 August for October contracts, after reaching US$77.16 on 5 July. Fresh concerns about the Delta variant of Covid-19 stymying the global recovery and an oversupply of oil are weighing on the market.
Still, in announcing his company’s second quarter earnings, Dril-Quip chief executive Blake DeBerry echoed many of Mr Eifler’s sentiments. While voicing concerns about the pace of global economic growth, and the corresponding recovery of oil and gas demand related to Covid-19, Mr DeBerry said, “We are optimistic about the second half of 2021 leading into 2022. We are seeing encouraging signs from our customers as many begin to formulate their 2022 capital budgets in the third quarter and expect additional resources to be allocated toward increased offshore activity.”
A manufacturer of drilling and production equipment, Dril-Quip booked US$50.4M in orders in Q2 2021, up 11% year-on-year. Among its contracts is one to provide its XPak De liner hanger systems over the next three years to Petrobras.
Other contractors and suppliers are benefiting from the drilling activity in Brazil. SBM Offshore has signed a letter of intent (LOI) with Petrobras to build, lease and operate a floating production, storage and offloading (FPSO) vessel for deployment in the Mero field in the Santos Basin offshore Brazil
The LOI includes a 22.5-year lease for the FPSO Alexandre de Gusmão. SBM Offshore will design and construct Alexandre de Gusmão using newbuild a multi-purpose floater hull combined with several standardised topsides modules. Completion of the FPSO is expected in 2024.
The FPSO will be designed to produce 180,000 barrels of oil per day and treat 12M standard cubic metres of gas per day, with a water injection capacity of 250,000 barrels per day and a minimum storage capacity of 1.4M barrels of crude oil.
Moored in 1,900-m water, the FPSO will be deployed at the Mero field in the Santos Basin offshore Brazil. The Libra block, where the Mero field is located, is under a production sharing contract (PSC) to a consortium comprised of Petrobras 40%, Shell Brasil (20%), TotalEnergies (20%), CNODC and CNOOC with 10% each and the state-owned company Pré-Sal Petróleo SA as manager of the PSC.
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