Bassoe Offshore AS

10/23/2020 | News release | Distributed by Public on 10/23/2020 06:30

Bassoe Analytics weekly rig market round-up (week 43)

Oct 23, 2020

The last week has brought further awards for ultra-deepwater drillships Stena Forth and Maersk Voyager, meanwhile Saudi Aramco opted to suspend operations for up to a year on another of its long-term jackup deals.

In case you missed it, you can access last week's rig market round-up here.

Rig Contracts

Maersk Drilling has been awarded a three-well contract from Total E&P Angola for the 7th generation drillship Maersk Voyager which will be employed to drill development wells in Angola's Block 17. The three-well contract has an estimated duration of 140 days, which means that Maersk Voyager is now contracted until Q2 2021. The firm value of the three-well contract is approximately USD 30 million, including integrated drilling services provided. The two one-well options included in Maersk Voyager's previously agreed work scope for Total E&P remain.

CNOOC International has now secured ultra-deepwater drillship Stena Forth for a one-well campaign offshore Canada, commencing in Q2 2021. The estimated 90-day campaign will cover drilling in the Flemish Pass off Newfoundland and Labrador. The operator had originally planned to use drillship Stena IceMax for drilling of the Pelles-1 exploration well in the region this year but the campaign was deferred due to the Coronavirus pandemic.

Shelf Drilling has confirmed that its has received a notice of suspension from Saudi Aramco on its 10-year contract for jackup Main Pass I. The rig deal will be halted this month for up to a year at a zero dayrate. The contract term will be automatically extended for a period equal to the suspension period. The contract, which includes an annual rate adjustment linked to the Brent oil price, started in February 2020.

It is now planned that jackupOriental Phoenix will commence work under a long-term agreement with Kuwait Oil in the Arabian Gulf around January 2021, with sister unit jackup Oriental Dragon to join the campaign about four months after this. Halliburton is providing the rigs for the project, which includes three-year terms with a six-month extension option. Work had originally been scheduled to begin in mid-2020.

Tender-assist semisubPV Drilling V is now scheduled to begin work for Shell Brunei during Q3 2021. The rig is still undergoing a reactivation campaign in preparation for the new six-year contract.

Atlantica Tender Drilling has agreed a contract amendment with Petrobras for the use of the semi-tender unit BassDrill Beta. The rig remains on long-term standby. Atlantica has agreed amended terms for the current standby period, including a lower day rate and the corresponding ability to reduce contractual manning and associated costs. The notice period for Petrobras to exercise the additional one-year option, which would extend the contract from March 2021 to March 2022, has been moved from November 2020 to December 2020. Atlantica has also now received a USD 8.3 million settlement from Petrobras in relation to historical withholding tax changes.

Drilling Activities & Discoveries

Total is currently using jackup Valaris JU-247 for well intervention operations at the 29/5b-F4 Franklin well and jackup Maersk Highlander for batch drilling of development wells at Culzean field, both in British waters. Egyptian Drilling jackupsEl Qaher I and El Qaher II have now concluded contracts with Petrobel offshore Egypt and are available for hire.

Turkish Petroleum (TPAO) has announced that the Tuna-1 exploration well, drilled in the Turkish Black Sea and now known as the Sakarya gas field, has encountered an additional 30m of gas bearing resevoir. The operator plans to drill two appraisal wells back to back at the discovery using its own ultra-deepwater drillship Fatih, while the sister rig, Kanuni, will undertake well testing. TPAO aims to start production from the field by 2023.

JackupAban VIII < /a>is scheduled to move inshore Singapore around October 20, following conclusion of its contract with Petronas offshore Malaysia. In Trinidad and Tobago, Transocean ultra-deepwater drillship Deepwater Invictus is drilling ahead on the BHP Billiton-operated Broadside-1 exploration well in the Southern licence.

Jackup PV Drilling III has commenced a new drilling campaign for Kris Energy in Cambodian waters. The rig will remain working at the Apsara Mini-Phase 1A project until early next year. Meanwhile, PV Drilling II has also commenced its new contract with Vietsovpetro offshore Vietnam at the White Tiger Oilfield.

BP has commenced its four-well drilling campaign using ultra-deepwater drillship Valaris DS-12 at the Angolan Platina field. It is expected that this will keep the rig busy until Q2 2021.

Rig Mobilizations

Dana Petroleum has concluded its charter of mid-water semisub Stena Spey at the Bittern field in the UK North Sea. It is understood that the rig is now being towed to Scapa Flow, Orkney, where it will remain until its next contract begins. This will be a 10-well plug and abandonment campaign off Ireland with Kinsale Energy, beginning in Q2 2021.

Jackup PV Drilling I is now on standby in Vung Tau anchorage after finishing a drilling campaign with Hibicus offshore Malaysia in late September.

Financial

Pacific Drilling announced that the High Court in London has denied the application of the company's subsidiaries, Pacific Drilling VIII Limited and Pacific Drilling Services, Inc., to be allowed to appeal the arbitration decision between those subsidiaries and Samsung Heavy Industries regarding the construction and sale contract for ultra-deepwater drillship Pacific Zonda.

On October 1, 2020, Seadrill Partners announced that it had elected not to make an approximately $46 million interest payment due and payable on September 30, 2020 under its Term Loan B (TLB) and enter into a 30-day grace period expiring on October 30, 2020. After concluding discussions with TLB lenders representing a majority of the TLB principal amount outstanding (the 'Ad Hoc Group'), an agreement has been reached that removes the potential for an event of default related to non-payment of interest at the end of the grace period and will provide a super senior loan in lieu of receipt of cash interest with respect to the Interest Payment. The option to participate will be offered to all TLB lenders on a pro-rata basis. However, participation beyond the Ad Hoc Group is not required for closing.

Other News

The Norwegian Petroleum Safety Authority (PSA) has begun an investigation into an incident on harsh-environment semisub West Bollsta on 17 October 2020, when a length of riser fell from the handling equipment during lifting. The incident happened on the drill floor when a length of riser was being lifted from a horizontal position to the vertical with the aid of hydraulic handling equipment. The area was reportedly cordoned off, and no personal injury has been reported as a consequence of the incident. The PSA reports that an investigation team is now looking into the accident.

News reports suggest that Saudi Aramco has informed vessel and rig owners of a new requirement to be Saudi Arabian-flagged by the end of 2021. Similar to Indonesian law, in order to flag the units, the asset has to be majority Saudi-owned.

Archer has secured a two-year contract extension with a major North Sea operator for the provision of platform drilling operations and maintenance services on seven UK North Sea installations. The extension will commence November 1, 2020, in direct continuation of the current contract. Over the next two years Archer will continue to deliver drilling operations, maintenance and intervention support services including the provision of well services and rental equipment. In addition, Archer's engineering team has been contracted to conduct one rig reactivation, as well as provide brownfield engineering and operation preparational support to the other six assets.

Philippines President, Rodrigo Duterte, has lifted the moratorium on petroleum exploration in the South China Sea, allowing for three projects to move ahead, including a possible joint venture with China. Service contractors have been notified to resume energy-related activity in the area, which had been suspended from 2014 due to territorial disputes. China claims almost the entire South China Sea, with Brunei, Malaysia, Vietnam and Taiwan to also have claims.

ExxonMobil has signed three risk service agreements with Angola for work in Block 30, 44 and 45 in the Namibe Basin. These areas are in water depths ranging from 1,500 to more than 3,000 metres. ExxonMobil will have 60% stakes and serve as operator, while Sonangol P&P will have the remaining 40%.

Market reports indicate that Suriname's state-owned oil company Staatsolie is planning to launch a shallow-water acreage bidding round later this month.

Newbuilds & Sales

It is now confirmed that 1980-built jackup Foresight Driller V has been sold and scrapped.

Caspian Sunrise has completed the acquisition of the submersible drilling barge Caspian Explorer, marking the company's step into offshore drilling.

Bassoe Analytics published a new report looking into newbuild offshore rigs that are stranded at shipyards: It's about to get uglier: Shipyard financiers facing $15.2 billion in newbuild drilling rig losses

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Data: Bassoe Analytics, Image attribution: Maersk Drilling.