Part of increased floater activity this week, Transocean’s ultra-deepwater drillship Deepwater Thalassa is moving out of the US Gulf and heading to Colombia under a contract with Shell
Westwood Global Energy senior rig analyst Paul Ezekiel reported in a podcast that the drillship will arrive in April to drill the Gorgon 2 exploration well. Operations are scheduled to last about 125 days to late August. Upon completion in Colombia, the drillship will head to Block 42 in Suriname, where it will drill the Zanderij-1 Exploration Well. Drilling is scheduled to take about 130 days until the end of 2022. “It’s unclear where the rig will go after Suriname, although some speculation has it going to Mexico or Trinidad,” said Mr Ezekiel. The rig is working under a 10-year contract with Shell that ends in February 2026.
Transocean reported its eighth-generation ultra-deepwater drillship Deepwater Atlas is out for sea trials. Once delivered by Sembcorp Marine, it will go on contract to Beacon Offshore for the Shenandoah project in the US Gulf of Mexico in Q4 2022.
Mr Ezekiel noted the ultra-deepwater drillship Valaris DS-4 has left Las Palmas and is bound for Rio de Janeiro, Brazil. Due to arrive 8 April, the rig will continue its reactivation in preparation for its contract with Petrobras. 548-day firm and 182-day option contract will start in June and keep the drillship busy until December 2023, and possibly June 2024.
The drillship work is part of an ongoing recovery in the offshore oil and gas market. Overall, global offshore jackup rig and floater drilling activity are trending up this week, bolstered by increased contracting in the North Sea and South America.
Westwood Global Energy’s RigLogix reported 349 jack-ups were under contract in week 13 2022, an increase of one unit week-on-week, while global floater activity moved upwards two units to close at 115.
In the US Gulf of Mexico, the number of offshore drilling rigs increased by two to 14 and up to two year-on-year, according to Baker Hughes. BP has exercised another contract option with Valaris to keep the deepwater spar drilling rig Mad Dog contracted in the US Gulf of Mexico through 2024. The rig works on the Mad Dog spar platform in Green Canyon Block 782. Valaris has managed the rig since mid-2011.
As part of its fleet rationalisation plans, Valaris reported the sale of its 1981-built, LT 116-C jack-up rig Valaris 37 and “retirement from the offshore drilling fleet.”
Offshore leasing delay
Meanwhile, the Biden Administration still has not released its new plan for offshore oil and gas leasing on the Outer Continental Shelf (OCS). The Bureau of Ocean Energy Management’s only offshore oil and gas acreage auction held in November was overturned by a federal judge, who said the administration failed to account properly for climate impacts in the offshore lease sale. Gulf of Mexico Lease Sale 257 generated US$191.7M in high bids for 308 tracts covering 1.7M acres in US federal waters of the Gulf of Mexico.
By law, the US Department of Interior is required to prepare a five-year offshore leasing programme to best meet national energy needs for the five-year period, including a schedule of oil and gas lease sales. The next five-year offshore leasing programme must be in place by 1 July 2022 but is well behind schedule.
The delay in releasing the programme could cost thousands of jobs and billions of dollars in tax revenue and hobble US Gulf of Mexico oil and gas production, according to a study released by the American Petroleum Institute and the National Ocean Industries Association (NOIA).
“At a time of geopolitical uncertainty and rapidly rising energy prices, Gulf of Mexico oil and gas production is more important than ever,” said NOIA president Erik Milito. “The longer we go without being able to explore and develop new leases offshore, the longer we weaken a key, proven national strategic energy asset in the US Gulf of Mexico,” he said.
The study forecasts that under a new five-year offshore leasing programme, the US Gulf of Mexico is projected to produce an average of 2.6M barrels per day of oil and natural gas from 2022–2040. A delay in the programme would translate into a drop of nearly 500,000 barrels per day less over that 18-year period.
APAC activity
Hibiscus Petroleum Malaysia has issued a market survey for a jack-up to undertake a drilling programme in North Sabah in East Malaysia scheduled to start in July 2023. The campaign will consist of 11 wells for a duration of 300 days.
Valaris DPS-1 is due to arrive 28 March in Dampier, Australia, where it will undergo short inspection before starting a 16-well contract with Woodside Petroleum. The contract will last about 300 days starting in April 2022. This will be followed by a 420-day campaign with Woodside Petroleum. The rig will be busy into H1 2024.
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