As the year moved towards the close of the third quarter, offshore drilling continued to gain momentum, registering the largest positive gains in contracted jack-ups and floaters of 2021
Still, the biggest story in the offshore drilling sector was the recovery of the US Gulf of Mexico from Hurricane Ida.
Hurricane Ida passed through on 29 August, shutting in about 95% of production from the oil patch, damaging rigs, offshore infrastructure, injuring personnel and
causing environmental incidents. The US Coast Guard (USCG) is prioritising nearly 350 reported incidents for further investigation by state, local, and federal authorities in the aftermath of Hurricane Ida. The USCG has been conducting overflights to identify any oil spills or discharges.
In response to the hurricane, the US Bureau of Safety and Environmental Enforcement (BSEE) reported personnel were evacuated from just over half (288) of the 560 manned production platforms, and from all 11 non-dynamically positioned drilling rigs and seven of the 15 DP-capable units. As of 6 September, BSEE reported 83.87% of oil production and 80.78% of gas production remains shut in.
The only US deepwater oil port, the Louisiana Offshore Oil Port (LOOP), is assessing its storm-related damage and continuing repairs. LOOP Marine Terminal is about 51 km south of land in the Gulf of Mexico.
Among the rigs damaged during the Category 4 hurricane was Noble Corp’s ultra-deepwater drill ship Noble Globetrotter II, which encountered severe weather and now is being assessed for repairs that will require it being taken into port. Additionally, Noble said “a small number of crew members were treated for minor injuries.” Reuters reported that nine crewmembers were injured.
Noble added that the drill ship’s living quarters continue to operate “normally with food service, climate-control, water, power, and internet systems functional. The vessel’s helideck is fully operational, and teams are working through logistical challenges across the Gulf coast region to resume normal levels of transportation to and from shore.”
When preparing to ride out the hurricane, Noble secured the well and detached Noble Globetrotter II from the blowout preventer. However, the driller said that during transit, the lower marine riser package, which is a series of controls that sits above the blowout preventer, and a small number of riser joints separated from the rig.
“We are in the process of completing a full assessment of the rig’s condition. Although we have insurance coverage for property damage with a US$10M deductible, our insurance policy may not adequately cover our losses, which could adversely affect our business.”
The 2012-built drill ship’s market value is US$38.85M, according to UK ship valuation firm VesselsValue.
The US Coast Guard’s Eighth District Outer Continental Shelf division has been working with Noble since 29 August to determine the extent of any damage, and to ensure the crew’s lifesaving equipment is functional and available in the event of an emergency.
The US Coast Guard said all of the communications between the drill ship’s master have maintained that the vessel was not in distress and not actively taking on water. Information released on social media, reportedly from the crew of Noble Globetrotter II, indicates potential issues with safety, including possible damage to the hull.
The USCG said it launched a helicopter aircrew from Air Station New Orleans to conduct an overflight of the drill ship and diverted the USCG cutter Venturous to the scene “out of an abundance of caution.”
Noble is developing a plan to bring the vessel into port for repairs. The vessel and crew are currently located 80 nautical miles south, southeast of Grand Isle, Louisiana in the Gulf of Mexico.
As a result of the damage, Noble sent a notice of force majeure to Shell. Under contract until early September 2023, Noble Globetrotter II was set to earn a contract day rate of at least US$275,000 from Shell, according to Noble’s latest fleet rig status report.
A flyover by Shell uncovered damage to its West Delta-143 (WD-143) offshore facilities. A closer inspection of the facility is required for a full assessment.
The WD-143 facilities serve as the transfer station for all production from Shell’s assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals.
Shell’s Perdido asset in the southwestern Gulf of Mexico was not disrupted by the hurricane, and its floating production, storage and offloading (FPSO) vessel Turritella is currently back on line.
Shell said all of its other offshore assets remain shut in and remain fully evacuated at this time. At the early phase of assessment and recovery, approximately 80% of Shell-operated production in the Gulf of Mexico remains offline.
Meanwhile, Seadrill’s plan to emerge from bankruptcy protection has been approved by the US Bankruptcy Court for the Southern District of Texas. The approval paves the way for the driller to emerge from Chapter 11 bankruptcy protection before the end of the year.
Brent crude oil (ICE) futures are actually down since Hurricane Ida, falling from US$73.41 on 29 August to US$71.93 per barrel on 7 September. Year-on-year, however, Brent crude is up almost 71% from when it was selling at US$42.01 in 2020.
Offshore global drilling rises
Outside the US Gulf of Mexico, the global offshore drilling picture posted its strongest weekly gains of the year during week 36, with the number of offshore jack-ups jumping to 350 and floaters to 114, according to Westwood Global Energy’s RigLogix. Both sectors were up five units week-on-week, with southeast Asia leading the charge in the jack-up sector rising two units to 33, while both North Sea and Middle East sectors remained unchanged.
Deepwater activity in the North Sea and West Africa climbed, bolstering overall floater activity. West Africa once again touched on its highest levels of the year, with 10 rigs contracted. Among the most recent awards, Borr Drilling signed a letter of intent with an operator in southeast Asia for the jack-up Mist that will start in November and last for about seven months. Mist has been idle since April.