Brent crude oil rose on expectations of tight demand, despite continued concerns about the spread of the Delta variant of Covid-19 in the US, UK, Asia and Africa
In a blow to the US tourism and travel industry, White House press secretary Jen Psaki said on 26 July restrictions on European and other international travellers would remain in place because of the threat of the spread of the delta variant.
Still, traders pushed Brent crude oil (ICE) up US$0.50 to US$75.00 for September 2021 contracts at 7:38 AM EDT on 27 July.
For week 30 2021, global offshore jack-up drilling rose, with gains in contracted units in the North Sea, the Middle East and southeast Asia. Overall, there were 344 offshore jack-up rigs contracted, a week-on-week gain of three units, according to Westwood Global Energy’s RigLogix.
Meanwhile, the floater market fell one unit week-on-week to 115, with the North Sea, South America and West Africa holding steady.
In the North Sea, British independent oil and gas company Serica Energy reported a successful flow test from the Columbus development well in 5,400 m of water. Maersk Drilling’s harsh environment jack-up rig Maersk Resilient supported Serica Energy’s Columbus development.
“The work scope involved a tie-on of the Columbus well to existing infrastructure, using minimal subsea equipment to minimise environmental impact and emissions. Serica Energy has characterised the campaign as “challenging but ultimately very successful, with the flow test showing a rate at the upper end of the expected outcome from the well,” Maersk Drilling reported in a social media post.
With the rig safely moved off site, Serica Energy said a dive support vessel would tie the subsea wellhead into the Arran Field export system. It is anticipated that Columbus start-up will occur in Q4 2021 once initial flow from the Arran field has reached stable conditions. Once it has been brought on stream the Columbus well is expected to produce at around 7,000 boe/d of which at least 75% is expected to be gas.
Sapura Energy nets contracts
In southeast Asia, 33 offshore jack-up rigs were contracted for the week, up two week-on-week, according to RigLogix. After securing US$284M in contracts for work in Malaysia and Thailand, Sapura Drilling now has eight drillings rigs contracted in the region for Q3 2022, increasing its fleet utilisation rate to 57%.
Subsidiary Sapura Offshore was awarded contracts by PTTEP Sarawak Oil Limited (PTTEP) and EnQuest Petroleum Production Malaysia Ltd (EnQuest) under the Pan Malaysia Transportation and Installation of Offshore Facilities 2021 campaign.
The scope of work from PTTEP includes transportation and installation, engineering, survey, interfacing, topside installation and handover, removal of temporary structures, and other optional works. The work lasts into October 2021.
Under the contract with EnQuest, Sapura Offshore will replace a 10-inch gas lift subsea pipeline and risers. The scope of work includes engineering, transportation, installation of risers, subsea tie-ins and precommissioning the pipelines. Scheduled for five months, the work will be complete by Q4 2021.
In the O&M segment, Sapura Energy, through its subsidiary Sapura Fabrication, won contracts from EnQuest, Sarawak Shell Bhd (SSB) and Sabah Shell Petroleum Co (SSPC).
The contract awarded by EnQuest is to provide maintenance, construction, and modification for its PM8 Extension Production Sharing Contract with the scope of work comprising project management, fabrication, offshore maintenance, construction and modification works. The one-year contract will last to mid-March 2022.
The award from SSB and SSPC is to provide topside major maintenance services works in various projects located in offshore Sabah and Sarawak. The contract is effective until mid-August 2023.
Sapura Drilling has been awarded two contracts from Petronas Carigali Sdn Bhd for work offshore Malaysia. One contract is to provide tender-assist drilling rig services for two years until April 2023, with an option for a two-year extension.
Under the second award, Sapura Energy, leveraging its drilling engineering capabilities within Sapura Drilling, SapuraOMV and in partnership with Halliburton, secured an Integrated Rig, Drilling, and Completion Services Contract for six wells offshore Malaysia. Scheduled to start in Q3 2021, the contract will be executed by the semi-submersible tender-assist drilling rig Sapura Esperanza.
Long-term work in Thailand
In Thailand, Sapura Drilling was awarded a new contract and a contract extension for its drilling rigs by PTTEP. Sapura Drilling will deploy the tender-assist drilling rig Sapura T-17 for three years, commencing between 15 October 2021 to 15 November 2021. The contract contains an option for an additional year.
Meanwhile, Sapura Drilling also received a contract extension notification from PTT Exploration and Production Public Company Limited and PTTEP International Limited. The four-month extension is for its tender-assist drilling rig Sapura T-18, extending it to 31 October 2021.
First oil from Van Gogh
Over the next few months, the semi-submersible Valaris MS-1 will complete the remaining two wells for the Van Gogh Phase 2 Infill Development offshore Australia. Santos reported first oil from the Van Gogh Phase 2 Infill Development, with the first of three new production wells producing at the ‘highest initial rate from an individual well in field history’.
Following completion and tie-in, the first well produced at a peak rate of 23,200 barrels per day, well ahead of expectations for a single well, said Santos.
Drilling of a second horizontal, dual-lateral production well is now underway.
The Van Gogh field (WA-35-L) is one of three subsea oil field developments located in the Exmouth Basin which tie into the floating production, storage and offloading vessel (FPSO) Ningaloo Vision.
17 rigs drilling in US Gulf of Mexico
In the US, the overall land and offshore drilling rig count continues to move north, up seven to 491 for the week ending 29 July, according to Baker Hughes. Offshore drilling in the US Gulf of Mexico remained steady at 17 contracted units and up five year-on-year.
Big news out of the Gulf of Mexico is that Shell Offshore took FID on deepwater development Whale. Located in the Alaminos Canyon Block 773 in about 2,600 m of water, Whale will use a semi-submersible production platform similar to Shell’s Vito project. With an estimated peak production of 100,000 barrels of oil equivalents per day and recoverable reserves of 490M barrels of oil equivalents, Whale will begin production in 2024. Whale is owned by Shell Offshore as the operator (60% interest) and Chevron USA (40%).
In other drilling news in the Americas this week, Shell Trinidad and Tobago reported first gas from Project Barracuda in the East Coast Marine Area in Trinidad and Tobago. Project Barracuda has approximately 25,000 barrels of oil equivalent per day (boe/d) of sustained near-term gas production with peak production expected to be approximately 40,000 boe/d. The Barracuda project comprises two subsea wells (both 100% Shell owned), one in the Endeavour field and the other in the Bounty field. Both are tied back to Shell’s Dolphin platform.
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