Rigs report: tracking regional rig movements since 2020; Saudi Arabia operators face contract suspensions

Contracts 

Transocean has landed a year-long contract extension for Deepwater Asgard with an unnamed independent operator in the US Gulf of Mexico. The programme is expected to commence in June 2024 in direct continuation of the rig’s current programme and includes additional services. The total contract value of approximately US$195M includes an US$11M lump sum payment, which is not included in the estimated backlog of approximately US$184M.

In the Middle East, Shelf Drilling reported a notice of suspension of operations for four jack-up rigs from a customer. The company said it remains unclear which rigs will be suspended and the timing of the suspensions. Shelf said it expects to be able to actively market the four rigs to other customers and to have opportunities to terminate the rigs’ contracts. 

Shelf Drilling chief executive David Mullen said, “We are disappointed with the decision to suspend four of our rigs, particularly in light of the outstanding operating performance of our rigs and teams over many years in the Middle East. This recent development will create near-term challenges, but we remain optimistic on the long-term outlook for the business. We have a leading position in multiple regions and see opportunities across our geographic footprint for our fleet of rigs.”

Another operator in the Middle East Gulf, Advanced Energy Services (ADES), received a suspension notice from an unnamed client in Saudi Arabia for temporary suspension of operations on five of the 33 offshore jack-up rigs the company has operating offshore. Similarly to Shelf Drilling, ADES’s mutually-agreed suspension of work offers flexible terms, allowing the rigs to tender for new work and complete that work before returning to Saudi Arabia to complete the work begun there. ADES also has the right to terminate the suspended contracts if it so chooses.

In southeast Asia, ADES has received a letter of intent from PTTEP Energy Development Co for a jack-up drilling rig contract in the Gulf of Thailand. The contract is set to begin in the second half of 2024, but the jack-up rig has not been named. The 18-month contract has an additional nine-month optional extension period. The total contract value for the firm and optional terms is around SAR 354M (US$94M), including mobilisation fees.

Dolphin Drilling has reached agreement with General Hydrocarbons Ltd (GHL) in a dispute concerning overdue payments and remaining work offshore Nigeria for semi-submersible rig Blackford Dolphin. 

The company said the agreement is intended to enable Dolphin Drilling to receive payment of all sums due under the contract, and to enable GHL to continue to utilise Blackford Dolphin for an agreed period. Following the agreement, the company has received a further payment and Blackford will continue operations for GHL. The next payment in the plan is due by late April 2024. Upon conclusion of the agreement, Blackford Dolphin will depart Nigeria for India. 

“It was important for us to find a win-win solution with GHL on the current contract, payment and work scope, and to create a predictable exit for the rig Blackford Dolphin from Nigeria while also ensuring on-time delivery of the unit for our next client in India”, Dolphin Drilling chief executive Bjørnar Iversen said.

Stena Drilling says it is planning a "significant equipment upgrade" for its seventh-generation drillship, Stena Evolution. 

"With this enhancement, Stena Evolution will be capable of drilling and completing wells requiring 20,000 psi (20K) pressure control, enabling drilling in previously inaccessible reservoirs for our clients. Stena Evolution is already equipped to handle a wide range of drilling operations, including exploration, development and production activities in offshore oil and gas fields worldwide. Upgrading the vessel for 20K operations will enable Stena Drilling to remain in the forefront of technological advancement in the drilling industry," the company said.

Stena Drilling, together with equipment supplier NOV, and Shell, will start the installation of the 20K subsea blow-out preventer and other key equipment in 2026. When the 20K equipment package is installed, the rig will be able to perform completion operations in the Sparta field on behalf of Shell in the US Gulf of Mexico.

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