Esgian Week 14 Report: Major Jackup Contract Suspensions

April 7, 2024

Esgian Week 14 Report: Major Jackup Contract Suspensions
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Esgian reports various drilling contractors disclosing details of discussions with Saudi Aramco regarding jackup contract suspensions in its Week 14 Rig Analytics Market Roundup. These contractors include Shelf Drilling, ADES, Borr Drilling, Arabian Drilling, COSL, and ARO Drilling.

Meanwhile, Transocean, Noble, and COSL rigs have firmed up new work in the US Gulf of Mexico, Suriname, and the North Sea, respectively.

Report overview:

Contracts

Shelf Drilling has received a notice of suspension of operations on four jackup rigs from a customer in the Middle East. The company is in active discussions with the customer to determine which rigs will be suspended and the exact timing of the suspensions. Shelf Drilling understands that, during the suspension period, it will have the right to actively market the rigs to other customers and opportunities and to terminate the applicable contracts.

Transocean has secured a 365-day contract extension for 12,000-ft drillship Deepwater Asgard with an independent operator in the US GOM.

Petronas has exercised an option for Noble 12,000-ft drillship Noble Voyager to drill an additional well on Block 52 offshore Suriname at a dayrate of $470,000.

Offshore drilling firm ADES said Thursday it had mutually agreed with its client Saudi Aramco to temporarily suspend operations of five jackup rigs operating in Saudi Arabia. ADES, which has 33 jackups on contract in the Kingdom, said the suspensions were for a period of up to 12 months, without providing details on which rigs exactly were being suspended.

Borr Drilling has received a notice of temporary suspension of operations for its 400-ft jackup Arabia I, operating for Saudi Aramco in Saudi Arabia. Borr Drilling said on Thursday that the temporary suspension would be for a period of up to 12 months.

Drilling contractor Arabian Drilling is in discussions with Saudi Aramco for contract suspensions of up to 12 months for three of its jackups.

China Oilfield Services Limited (COSL) stated that it had received a notice from a “customer in the Middle East” to suspend the operation of four jackups. This client is understood to be Saudi Aramco, which is in discussions for contract suspensions with a number of drilling contractors in Saudi Arabia.

ARO Drilling has received a notice of suspension from Saudi Aramco of the contract for 350-ft jackup Valaris 143. The suspension period is for up to 12 months.

Since Saudi Aramco announced in late January 2024 that it had been directed by Saudi Arabia’s Ministry of Energy to maintain its maximum sustainable capacity at 12 million b/d rather than continue towards a previous goal of 13 million b/d, the offshore drilling market has awaited the effect this would have on the large number of jackups under contract. This week, Aramco has issued notices to multiple drilling contractors of contract suspensions. According to market sources, 23 jackups are to have their contracts with Aramco suspended in the coming months.

COSL Drilling has confirmed a new contract award for its 2,460-ft semisubmersible, COSLPioneer, with Vår Energi in Norway.

Drilling Activity and Discoveries

Oil and gas company EnQuest plans to drill three infill wells and deliver three well workovers, with six wells to be plugged and abandoned at its PM8/Seligi field offshore Malaysia.

Deepwater US GOM-focused operator LLOG Exploration Company plans to drill and complete multiple wells across the Buckskin, Leon and Castile fields in the US GOM and drill three additional prospects in the area of its Who Dat development in 2024.

Deltic Energy has received the required regulatory and partner consents for the farm-out of a 25% interest in the Shell-operated Licence P2437 in the UK North Sea, containing the Selene Prospect, to Dana Petroleum.

The Norwegian Offshore Directorate (NOD) has granted Wintershall Dea Norge a drilling permit for an exploration well in the North Sea offshore Norway.

Following operator LLOG’s announcement of new wells to be drilled at the Who Dat field in the US GOM, partner Karoon Energy has confirmed that the Who Dat East appraisal/exploration well will be drilled with drillship Noble Valiant, while the Who Dat South exploration well will be drilled with drillship West Neptune.

Demand

Prima Energi has received approval from Indonesia’s Ministry of Energy and Mineral Resources for a revised plan of development (POD) for the Ande-Ande Lumut (AAL) Oil Field, located in shallow waters on the Northwest Natuna PSC in the West Natuna Sea.

Reliance has updated a contract start window and extension options under its drillship tender in India. The new contract start window is between 1 December 2025 to 31 January 2026.

Mobilisation/Rig Moves

The 800-ft tender assist drilling rig Sapura Berani has left EPIC Group's West Wharf in Kemaman Port in Terengganu, where it had been since December 2023.

Vantage Drilling 12,000-ft drillship Platinum Explorer has begun its mobilisation from Indian waters to Singapore, then onto Labuan, Malaysia, where the rig will undergo its five-year special periodic survey, maintenance and be upgraded with a six-ram BOP.

Noble Corporation’s 400-ft jackup Noble Regina Allen has left the North Sea region and is en route to Argentina ahead of a new contract with TotalEnergies.

The Ocean Oilfield-owned 150-ft jackup B152 will perform its special periodic survey (SPS) at the KEZAD shipyard in Abu Dhabi. The jackup is expected to stay in KEZAD shipyard for a few weeks before returning to continue its contract with ADNOC.

Ocean Oilfield's 280-ft jackup Aras Driller has left the shipyard and is en route to its first location to start drilling operations for Pakistan International Oil Limited. Aras Driller performed its maintenance, contract preparation and acceptance test for this campaign in the KEZAD shipyard in Abu Dhabi.

The 2012-built 10,000-ft semisubmersible La Muralla IV has been renamed Independencia 2 and moved from Curacao to Aruba after underdoing a yard stay for reactivation.

ADES' 250-ft jackup Admarine 261 completed its OOS and left the yard in Bahrain on Thursday. The rig is now on the move in the Persian Gulf, apparently being towed by the Lanpan 33 vessel, en route to Saudi waters, where it will start its contract with Saudi Aramco.

The Valaris-owned 12,000-ft drillship Valaris DS-17 has set sail to Rio de Janeiro as it commences its journey to Argentina for a contract with Equinor.

Other News

Mitsui Oil Exploration Co., Ltd. (MOECO) has, with its partners, made a final investment decision and concluded related contracts regarding the Block B Project development in Vietnam, encompassing an upstream gas field and a pipeline linking it to a gas-fired thermal power plant complex.

Diamond Offshore expects to complete the sale of cold stacked 10,000-ft semisubmersible Ocean Monarch for recycling in the first half of 2024. 

Diamond Offshore began reporting Ocean Monarch as held for sale in 2023 and engaged a broker to assist in evaluating the sale of the unit.

Beacon Offshore Energy LLC has completed the divestment of its non-operated interests in certain fields in the deepwater Gulf of Mexico to O.G. Oil & Gas Limited affiliate company GOM 1 Holding Inc.

Orcadian Energy has completed the previously announced farm-out of an 81.25% interest in licence P2244 in the UK North Sea, which contains the Pilot field, to Ping Petroleum. Ping is focused on shallow water offshore production and development opportunities and has a significant acreage holding to the east of Pilot.

Northern Drilling’s applications for leave to appeal an arbitrations tribunal’s awards have been refused and the company’s applications challenging the awards on grounds of serious irregularity have been dismissed by ruling of the UK’s Technology and Construction Court.

Eldorado Drilling is understood to have taken delivery of the 12,000-ft 7th generation drillship Dorado, also known as West Dorado, from Samsung Heavy Industries in South Korea.

Panoro Energy has reached an agreement with the government of Equatorial Guinea on the key terms and conditions for the award of offshore Block EG-23.

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