‘Major discovery’ in Ivory Coast part of increased deepwater drilling activity in West Africa, with 10 floaters contracted, while Petronas focuses on Limbayong FPSO for Malaysia
While investors are clamouring for more money to be poured into offshore wind — propelling the market to record contract awards in 2020 — regions such as West Africa continue to draw interest from oil and gas developers.
Deepwater offshore oil and gas exploration in the region is recovering, with 10 floaters actively drilling in West Africa as of Q3 2021 (week 37), according to Westwood Global Energy’s RigLogix. This is double the floaters drilling in the region at the same time in 2020.
One of those floaters operating in West Africa is the drill ship Saipem 10000. It was used in a drilling campaign by Italy’s Eni for a “major discovery” in September about 60 km off of the Ivory Coast in 1,200 m of water and a depth of 3,445 m. Eni estimates the discovery at between 1.5Bn and 2Bn barrels of oil and between 1.8Tn and 2.4 Tn cubic feet (tcf) of associated gas.
Baleine-1x is the first exploration well drilled by the Italian oil giant in the Ivory Coast. One of the largest international oil and gas producers in Africa, Eni owns a participating interest in a total of five deep water blocks in Ivory Coast, all with the national oil company Petroci Holding. It has additional interests in Angola, Egypt, Libyan Mozambique and Nigeria.
This is the first hydrocarbon discovery in the Ivory Coast’s deep waters in 20 years. Plans call for the start of studies for a “fast-track development” of the Baleine discovery, says Eni.
Eni and Total bought about US$185M in blocks from the Ivory Coast government during the country’s licensing round in 2019.
While OSV utilisation levels are at 67% — below that of other major offshore sectors except the US Gulf of Mexico — West Africa has generated some significant work for vessel owners. In Cameroon, Maersk Supply Service (MSS) reports it will conduct Phase 2 of a mooring system maintenance project on the Kome-Kribi 1 floating storage and offloading (FSO) unit under a contract with COTCO.
The work scope of the project involves replacing two link arms on a yoke mooring system on the Kome-Kribi 1 Marine Terminal and follows Phase 1, during which MSS carried out the design, engineering, procurement and installation of a temporary redundancy system.
Maersk will provide full project management, engineering and two months of offshore operations, starting in Q4 2022. The offshore operations will require an I-class subsea support vessel (SSV) and two anchor-handling tug supply (AHTS) vessels, which will also be employed for station keeping of the FSO.
MSS senior chartering manager for Africa Thomas Danielsen says the project offers “a new opportunity to combine our extensive vessel experience with our project management capabilities to carry out work on a less common mooring system, where the operations in this case will happen above surface.”
“The Limbayong project is aligned with Petronas’ three-pronged growth strategy to expand our resource base”
In early September, Solstad Offshore reported multiple new medium-term contracts in West Africa, signing letters of agreement for seven platform supply vessels (PSVs). All of the contracts start in Q4 2021 and Q1 2022, with the total firm duration of about 1,000 vessel days, with options to extend the contracts further.
In Gabon, BW Energy has now concluded the drilling and the logging of the exploration well Hibiscus North (DHBNM-1). Drilled to a total depth of 3,336 m, the well is located in a separate structure, about 6 km north-northeast of the Hibiscus discovery in 115 m of water. The field could be incorporated into future development planning, with a possible tie back to the Hibiscus Ruche development, says BW Energy.
The jack-up rig Borr Norve is now continuing to finalise drilling operations, after which the well will then be plugged and abandoned.
In Namibia, the drill ship Valaris DS-10 will be deployed for one-well contracts with Shell Namibia Upstream BV and Shell Sao Tome and Principe BV offshore Namibia and Sao Tome and Principe. Valaris says the first contract will start in Q4 2021, with the Sao Tome and Principe contract following on directly from the Namibia contract. The contracts have an estimated duration of 60 days each.
Optimising logistics in Africa
Optimised logistics are becoming increasingly important in an effort to reduce costs and cut emissions in offshore oil and gas production.
To support its deepwater drilling activity, Shell has tapped Bourbon Offshore to provide international freight forwarding, integrated logistics services and PSVs.
Under its contract, Bourbon Offshore will supply the international shipment and clearance of equipment for both Shell and its subcontractors from Houston to Walvis Bay. Bourbon will manage the logistics base and associated services, including handling and lifting, material management, storage and warehousing, waste management and tank cleaning, and deploy two PX105 and one P105 design PSVs.
Bourbon Logistics will support the contract with its digital data management system “Bourbon Logistics Suite,” which allows users to plan, execute and monitor the whole logistics supply chain from end to end.
The precise timing of the drilling is to be announced and each well is expected to last for 60 days.
Bourbon will provide Integrated Logistics services through its local branch, Bourbon Logistics Namibia, with its local partner Logistics Support Services (LSS).
In Nigeria, P&O Maritime Logistics and its local partner Nigerian firm IO Materials Services (IOMS) have launched a new logistics solution called FlexDelivery. This new logistics solution looks to avoid high shore-base startup costs, rentals and vessel time-chartered contracts by focusing on cargo delivery. FlexDelivery uses a freight-rate model targeted at the offshore energy industry that traditionally relies on an asset and facility model.
“Inefficient supply chain logistics in Nigeria can cost about two to four times more than the global average”
P&O Maritime Logistics vice president logistics Christian Arndt tells OSJ the new service is aimed at reducing delivery times, enhancing visibility and predictability while re-inventing procurement strategies, inventory management tactics and the energy supply chain as a whole.
Using big data and AI technology, FlexDelivery enhances visibility by providing predictability with a real-time view on cargo movement and delivery dates all controlled through an online booking platform.
The new offering, which began service on 4 September, is an expansion of P&O Maritime Logistics’ ‘Supply on Demand’ to integrate shore base and quayside operations to deliver a comprehensive logistics solution.
Mr Arndt says the logistics supply chain associated with offshore oil and gas development in Nigeria can be very expensive because it relies on manual, paper-based operations.
Inefficient supply chain logistics in Nigeria can cost about two to four times more than the global average for running an offshore supply operation, according to Mr Arndt.
Mr Arndt anticipates FlexDelivery will reduce costs by 20-30% per good transported, lower fuel consumption by 20-30% and trim distance travelled by 40 -50% compared to traditional time-charter supply contracts.
“By launching in Nigeria, P&O Maritime Logistics is showing the industry that smart solutions can generate efficiency gains and lower production costs. Customers will see reduced equipment, inventory carrying, and supply chain costs, while boosting productivity,” he says.
Shore bases will be operated by IOMS from its locations, providing wide coverage for oilfields across the Nigerian offshore energy industry.
Awaiting Limbayong FPSO
Halfway around the world in southeast Asia, Malaysian oil company Petronas is focusing on making investments closer to home to meet the region’s increasing energy needs. One of the world’s largest producers of LNG, Petronas clearly sees LNG as an important bridging fuel and was a pioneer in floating LNG vessel (FLNG) technology. It has invested in two FLNG vessels to exploit gas reserves in Malaysia’s remote and stranded gas fields.
Earlier this year, it commissioned PFLNG Dua, the second of its two FLNG vessels. Petronas took delivery of the world’s first FLNG vessel, PFLNG Satu, in 2016.
Petronas wants to use another floating technology – an FPSO – to tap into its deepwater oil and gas resources. It is evaluating bids for the Limbayong FPSO with a contract award expected to be handed out before the end of the year. Contractors involved in the bidding process are Yinson, MISC, Sabah International Petroleum, and a consortium comprising Bumi Armada, MTC and Shapoorji Pallonji.
In June, Petronas awarded an engineering, procurement, construction, installation and commissioning (EPCC) contract for a subsea production system, Umbilical, Riser and Flowline (SURF), for its Limbayong Deepwater Development Project to a subsidiary of TechnipFMC.
At the virtual signing, Petronas executive vice president and upstream CEO Adif Zulkifli,
Said: “The Limbayong project is aligned with Petronas’ three-pronged growth strategy to expand our resource base. We hope the project, which is PCSB’s first deepwater development undertaking in Malaysia, will give confidence and invite potential investors to collaborate further in maturing the country’s deepwater resources. Apart from monetisation, Limbayong will be a platform to enhance our internal capabilities in preparing for the next deepwater projects, not only in Sabah but also in other regions.”
Limbayong is an oil and non-associated gas field located 120 km offshore Sabah in water of between 900 and 1,200 m. The field consists of 10 deepwater wells which tie back to the project’s FPSO, while the subsea system is made up of SURF.
Petronas posted improved results in H1 2021, with revenue of RM109.6Bn (US$26.3Bn), a 17% increase from RM93.6Bn (US$22.5Bn) in H1 2020. While the Malaysian oil company has projected its capex will be RM40Bn-RM45Bn (US$9.6Bn-US$10.8Bn) annually over the next five years, spending in H1 2021 fell below expectations at RM12.6Bn (US$3.0Bn). Hong Leong Investment Bank expects Petronas to ramp up spending in the second half to reach a total of RM35Bn (US$8.4Bn) for 2021.