Brent crude oil plunged almost US$5 on 19 July after OPEC and its allies agreed to supply increases and new concerns emerged about the effect of the rapid spread of the Delta variant of Covid-19 on energy demand
August contracts for Brent crude oil settled at US$68.62 per barrel – a loss of US$4.97 – for the day. On 20 July, oil traders drove the price down further to US$66.42.
Fears are the OPEC+ compromise deal to supply an additional 2M barrels of oil per day by the end of 2021 will lead to an oversupply due to slowing demand because of the Delta variant.
Oil rebounded on 21 July, with September 2021 contracts for Brent crude oil (ICE) trading at US$70.22 per barrel at 8:03 AM EDT.
Global deepwater drilling activity continued its positive gains led by West Africa, which climbed to its highest levels of the year, with nine floaters contracted during week 29 2021. Overall, there were 116 floaters – semisubmersibles, drill ships and other floating production units – contracted for the week, with activity remaining stable in the
North Sea and South America, according to data from Westwood Global Energy’s RigLogix.
Trying to emerge from Chapter 11 bankruptcy, Seadrill, which has secured contracts for three of its drill ships – West Tellus, West Neptune and West Saturn – in Brazil and the US Gulf of Mexico, has attracted intense interest from potential rival drilling contractors. A consortium consisting of drilling contractors Transocean, Dolphin Drilling and an unidentified third party are competing against Noble Corp to acquire the assets of Seadrill Ltd, according to a report by Reuters. Seadrill, controlled by shipping magnate John Fredriksen, voluntarily entered US Chapter 11 bankruptcy to restructure its in debt. It is seeking to negotiate with creditors the restructuring of US$7Bn in debt in exchange for control of the company. Such a deal would have to be approved by the bankruptcy court.
Seadrill’s West Tellus is operating in Brazil for Petrobras until September 2021, after which it will remain in country to go on contract to Shell from October to January 2022. West Saturn is drilling for ExxonMobil in Brazil until November 2021. It will then go on long-term contract in Brazil with Equinor from April 2022 to March 2026. West Neptune is drilling for Talos in the Gulf of Mexico until July 2021, followed by work for Kosmos into August 2021.
Meanwhile, offshore jack-up rig activity had its biggest weekly falloff, with the number of units contracted dropping five week-on-week to 341. This was mostly accounted for by a decrease in jack-up drilling in southeast Asia, which fell from 34 to 31 contracted units week-on-week. Jack-up drilling in the North Sea and Middle East remained stable.
Abu Dhabi’s largest oil producer is looking to boost its production capacity to 5M barrels per day by 2030. Underpinning this effort, ADNOC Offshore awarded US$763.7M in contracts for integrated rigless services across six of its artificial islands in the Upper Zakum and Satah Al Razboot (SARB) fields.
The contracts by ADNOC Offshore were awarded to Schlumberger (US$381.18M), ADNOC Drilling (US$228.1M), and Halliburton (US$153.87M) after a competitive tender process.
ADNOC upstream executive director Yaser Saeed Almazrouei said, “These important awards for integrated rigless services will drive efficiencies of drilling and related services, and optimise costs in our offshore operations as we ramp up our drilling activities to increase our production capacity and enable gas self-sufficiency for the UAE.”
The six artificial islands covered by the awards are Asseifiya, Ettouk, Al Ghallan, and Umm Al Anbar in the Upper Zakum field and Al Qatia and Bu Sikeen in the SARB field.
ADNOC Offshore says artificial islands provide significant cost and environmental benefits, particularly in shallow water, by enabling the use of lower-cost land-drilling rigs instead of higher-cost offshore jack-up drilling rigs.