A looming energy shortage in Europe has prompted a move to issue more drilling permits.
The UK’s North Sea Transition Authority (NSTA) has launched a new offshore oil and gas licensing round, making 898 blocks and part-blocks available with over 100 licences up for grabs. Acreage will be offered in the west of Shetland, northern, central and southern North Sea and east Irish Sea.
The NSTA said it has identified four priority cluster areas in the southern North Sea which have known hydrocarbons and are close to infrastructure. NSTA believes these areas have the potential to be developed quickly and applicants are encouraged to bid for these areas first, so they can go into production as soon as possible to meet the UK’s energy security needs.
The application period runs until 12 January 2023 and it is expected the first licences will be awarded from Q2 2023.
In Norway, regulators have extended elevated production levels from the Duva oil and gas field. In April, regulators permitted Neptune Energy and its licence partners to temporarily increase gas production by 6,500 barrels of oil equivalent per day until September. A new permit will allow the higher production rate to be maintained until the end of the year. Gas from the Duva field is tied back to the Gjøa platform and transported by pipeline to the UK’s St Fergus gas terminal.
Meanwhile, Cyprus is looking to push on with its plan to extract gas from offshore fields. The island nation expects natural gas from its seas to become commercially available by 2027. Drilling in Aphrodite, Cyprus’ first gas discovery, is expected to begin next year. While the Mediterranean has huge reserves of hydrocarbons, much of it remains untapped. Aphrodite is located 160 km south of Limassol and 34 km west of Israel’s Leviathan field and the block is subject to a dispute between Israel and Cyprus.
In the Middle East, ADNOC continued its efforts to expand its fleet and work towards its stated goal of raising crude production by the end of the decade. Abu Dhabi’s state-run firm has sanctioned US$1.5Bn to ADNOC Drilling to support the expansion of offshore operations and meet the growing global demand for hydrocarbons. ADNOC Offshore awarded the two-year contract, which covers the provision of 12 jack-up rigs and two island rigs, to Integrated Drilling Services.
In contracts news, active jack-ups in week 41 remained static week-on-week at 388 active units, while floater activity declined marginally, according to the latest data from Westwood Global Energy.
Shelf Drilling has secured contract extensions for two newly acquired jack-ups. Noble Sam Turner secured a two-year contract extension in direct continuation of its current contract in Denmark by way of a priced option exercised by the customer.
The extension is valued at approximately US$68M, keeping the rig employed till March 2025. The rig will be renamed Shelf Drilling Winner upon completion of the official renaming process in early 2023. Noble Sam Turner is one of five jack-ups Shelf Drilling agreed to purchase from Noble Corp for the latter to obtain regulatory approval for its merger with Maersk Drilling.
Another rig, Shelf Drilling Victory, clinched a five-year contract worth US$236M for work in the Middle East Gulf. The contract includes a two-year option, with the planned start-up of operations set for late-March 2023. Prior to mobilising, the jack-up will complete a reactivation and upgrade project, currently underway in the United Arab Emirates.
Odfjell Drilling’s Deepsea Yantai rig added another extension with Neptune Energy to drill two more wells in the Norwegian North Sea. The extension keeps the rig employed for 60 days and is scheduled for Q3 2023.
After a financial restructure, UK-headquartered Seadrill Ltd has received approval to relist on the New York Stock Exchange. The company said it expects to commence share trading on or about 14 October 2022. In early September, Seadrill agreed to sell seven jack-up rigs to ADES Arabia Holding Ltd – a leading provider of rigs to Saudi Aramco – which will employ the crews operating the rigs and will hold the drilling contracts related to the rigs. The total for the deal came to US$628M in cash, subject to completion.
In Singapore, shipbuilder Sembcorp Marine will defer payments for Borr Drilling from 2023 to 2025 after Sembmarine’s subsidiary PPL Shipyard reached an in-principle agreement with the drilling contractor.
The payment relates to the nine jack-ups Sembcorp Marine delivered between 2017 and 2019, estimated at around US$1.3Bn. The new terms include higher interest payments on the back of improvement in the oil drilling market. The deferment will result in Borr Drilling making earlier and higher amounts of interest payments and partial principal repayments to Sembcorp Marine.
Australia’s Federal Court will hear an appeal by Santos, seeking to resume drilling at the Barossa gas project in the waters of the Timor Sea, north of Darwin.
Dennis Tippakalippa, a Munupi clan member and Tiwi Islander, who served as plaintiff, successfully argued that his community was not properly consulted before approval for the project was granted. The waters offshore have spiritual and material significance for the community. In September, a federal judge found the regulatory approval invalid.
Santos has since appealed that decision and Chief Justice James Allsop has granted an expedited hearing pegged for 15-16 November.
And finally, Brazil’s Búzios field welcomed a new FPSO last week when Almirante Barroso MV32 arrived in Angra dos Reis, in the state of Rio de Janeiro, where its commissioning will proceed in a local shipyard.
Almirante Barroso was converted from a VLCC and delivered by COSCO Shipping Dalian in China. The unit will work in the Búzios field and has a stated capacity to produce up to 150,000 barrels of oil and 6M m³ of gas every day.
Japanese firm MODEC, which built the unit, has more projects in commissioning for Brazil: notably FPSOs Anita Garibaldi MV33 and Bacalhau.
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