TotalEnergies chief executive Patrick Pouyanné said the company is committed to drilling an exploration well in Block 9 offshore Lebanon “as soon as possible”, this year. Assessments could begin early this month with well-drilling to launch in Q3 2023, according to the company
TotalEnergies and Eni have completed the transfer to QatarEnergy of a 30% interest in exploration Blocks 4 and 9 offshore Lebanon. Both companies will retain a 35% interest each in the blocks, where TotalEnergies serves as operator, with QatarEnergy holding the remaining 30%.
The recent delineation of Lebanon’s maritime border with Israel has created a new momentum for hydrocarbon exploration in the region. Block 9 lies mostly in Lebanese waters but a portion lies south of the new maritime border with Israel. Total and Israel have agreed a separate deal for any revenues generated from there.
In contracts news, Transocean has won a US$400M contract award for its ultra-deepwater drillship Dhirubhai Deepwater KG2. The drillship was awarded a 910-day contract by an unspecified "national oil copmany" for work offshore Brazil. The estimated backlog of US$392M excludes a mobilisation fee of 90 times the contract dayrate, according to Transocean, and the new contract is expected to commence Q3 2023.
Also this week in Brazil, offshore shipyard Keppel Offshore & Marine (Keppel O&M) said it has settled a US$65M fine imposed by Brazilian authorities related to the Operation Car Wash bribery scandal. The fines are penalties imposed on Keppel O&M in relation to corrupt payments made by a former agent of the company to Petrobras, to win rig-building contracts.
In December 2022, Keppel reached a leniency agreement with Brazil’s Attorney-General’s Office (AGU) and Comptroller General of the Union (CGU) and committed to pay a fine of roughly US$65M. This was in addition to a global resolution reached in December 2017 with authorities in Singapore, Brazil and the United States when Keppel O&M was fined US$422M for its part in Operation Car Wash. Last month, Singapore’s Corrupt Practices Investigation Bureau (CPIB) noted Keppel has paid the US$422M fine.
As part of the 2017 resolution, Keppel O&M agreed to pay a balance sum of US$53M within three years.
Singapore’s Attorney-General’s Chambers (AGC) and CPIB subsequently extended the credit period to 23 March 2023 due to Keppel’s ongoing discussions with both the Brazilian AGU and CGU, which required separate negotiations as the agencies have a parallel mandate to enforce certain corruption laws. AGC and CPIB have confirmed that Keppel has paid the US$53M.
In the US, Senator Dianne Feinstein and Congressman Jared Huffman have introduced a new bill to ban offshore drilling along the outer Continental Shelf off the coast of California, Oregon and Washington. Senator Feinstein’s office said the proposed West Coast Ocean Protection Act has the support of nine other Senators and 30 Congressmen. No new federal leases have been issued along the Pacific Coast since 1984.
Back to contracts, semi-submersible rig Blackford Dolphin has successfully completed a five-year recertification. Operator Dolphin Drilling said the unit will soon be ready to commence its 12-month drilling contract with General Hydrocarbons Ltd in early March.
According to Westwood Global Energy Group’s weekly count of global rigs’ contracted activity through its RigLogix platform, rig numbers in week 5 2023 slipped slightly. Jack-up activity in the North Sea slipped by two and floaters fell by one in West Africa; total global rigs activity fell by four from the previous week.
Energy analyst Westwood said it expects the global offshore rig utilisation to average 95% this year. With a restructuring of global energy flows tied to war and sanctions came a rebound in demand for oil and gas, and 2022 proved a good year for rig owners.
From July through December, rig utilisation stood at over 90% for jack-ups and day rates continued to grow. For the jack-up market in 2023, Westwood expects more of the same. For drillships and semi-submersibles, the analyst believes supply and demand will remain tight and utilisation will sit close to 95%.
Rig demand in the golden triangle – the Gulf of Mexico, South America and West Africa – will keep the fleets currently working there employed and some incremental demand growth will be seen. There are currently 73 rig requirements globally that are in some form of rig inquiry. The golden triangle accounts for 23 of these inquiries, according to Westwood.
Westwood also notes that 83 of the 162 active floating rigs have no availability in 2023. Of the remaining 64 contracted units with a 2023 available date, 28 run until November or December and 12 of the 64 have options that, if exercised, will extend availability into 2024 or later.
In financial news, Borr Drilling has issued US$400M in bonds for debt refinancing. Last week, the company raised US$250M in senior unsecured convertible bonds, to be used to refinance the outstanding US$350M of convertible bonds due 23 May 2023 and for general corporate purposes.
Borr has placed secured bonds worth US$150M maturing in 2026. The secured bonds will have a fixed coupon of 9.50% payable semi-annually and will be secured by, among other assets, first priority mortgages over the jack-up rigs Frigg, Odin and Ran. Settlement of the secured bond offering is expected to take place 9 February.
Finally, shareholders at Norwegian subsea supplier DOF have been told to approve the company’s restructuring plan or face bankruptcy. The DOF board of directors submitted a proposal to the group’s financial creditors last week. The proposal will see existing shareholders only own 3.75% of a strengthened DOF after debt is converted to new equity. The company reportedly has the backing of one of its main shareholders, Møgster Offshore, which owns around 31.60% of the shares.
Interested in the offshore energy market? Get ready for OSJ Week 2023, kicking off with the European Dynamic Positioning Conference and Offshore Wind Journal Conference on 7 February, followed by the Annual Offshore Support Journal Conference, Awards & Exhibition on 8-9 February 2023 in London. Book your reservation here.
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