Rigs Report: Chevron Eyes Drillship For Eastern Mediterranean

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Credit: Jan-Rune Smenes Reite/Pexels
  • Chevron wants to expedite the development of the Aphrodite gas field that lies to the southeast of Cyprus. 
  • Italian major Eni awarded Saipem a two-year contract extension for use of the Santorini drillship in the US Gulf of Mexico. 
  • In the UK North Sea, operations have resumed at the Shell-operated Pierce Field following an upgrade to the Haewene Brim FPSO. 

US oil major Chevron is reportedly seeking a drillship to explore for natural gas off Cyprus, Egypt and Israel in the eastern Mediterranean while Transocean has announced major deals for four of its harsh environment jack-up rigs.

Drillship for Eastern Mediterranean

A Reuters report has said Chevron wants to expedite the development of the Aphrodite gas field that lies to the southeast of Cyprus. 

The company also operates Leviathan, the major gas field offshore Israel which produces 12 bcm of gas per year for Israel, Egypt and Jordan.

Oil majors BP and ADNOC have made an offer for a 50% stake in the Israeli firm NewMed Energy. NewMed holds the largest stake in the Leviathan field.

Vast reserve of untrapped natural gas

The eastern Mediterranean holds vast reserves of untapped natural gas, and American energy majors are eyeing these fields as they look to capitalize on the growing demand for natural gas in Europe and the Mediterranean in the wake of Russia’s invasion of Ukraine.

In the UK North Sea, trade union Unite said offshore workers employed by TotalEnergies are being balloted on possible strike action. 

The Unite members being balloted on strike action include control room operators, mechanical, operations and production technicians and skilled engineers, based at the Elgin Franklin and North Alwyn platforms and the Shetland Gas Plant off the east coast of Scotland. 

The ballot covering Elgin Franklin and North Alwyn platforms is currently open while the ballot covering the Shetland Gas Plant is open as of 19 April. Both ballots close on 5 May, according to Unite.

Strike action

Unite has also confirmed strike action involving 1,350 offshore workers across five companies will go forward from 24 April to 26 April in what it described as a ’tsunami of industrial action’.  

The trade union has said the strike action will bring platforms and the offshore installations of major oil and gas operators to a ‘standstill’. 

The corporations to be hit by the action include BP, CNRI, EnQuest, Harbour Energy, Ithaca, Shell and Total. 

And environmental campaigners have made news this week by setting a deadline for the UK government to cease all exploration for new fossil fuels immediately. 

The groups have given the UK government until 24 April to agree to talks, vowing to initiate disruptive actions in protest if the government fails to meet the deadline.

Contract extension

In contract news, jack-up utilisation has reached a new high of 402 active units this week.

Italian major Eni awarded Saipem a two-year contract extension for use of the Santorini drillship in the US Gulf of Mexico. 

The contract extension comes into force in August 2023 and is worth approximately US$280M. Saipem’s existing offshore backlog exceeds US$1.4Bn.

Saipem first chartered Santorini from Samsung Heavy Industries in 2021 before exercising a purchase option in December 2022, citing the positive environment for offshore drilling and rising day rates for drillships. The day rate for Eni’s extension works out to about US$383,561. 

Environment jack-ups

Transocean has issued its quarterly fleet status report with four harsh environment jack-ups scoring major deals: Transocean Enabler was awarded a 19-well contract in Norway at a day rate of US$377,000 with options for eight wells.

Transocean Encourage inked a nine-well contract in Norway at US$350,000 per day. Wintershall Dea exercised four one-well options in Norway for Transocean Norge. 

Day rates stand at US$338,000 per day, US$358,000, $358,000 and US$408,000 respectively. And Transocean Endurance secured a multi-well plug and abandonment contract in Australia at a rate of US$380,000 per day plus options.

The aggregate incremental backlog associated with these fixtures is approximately US$645M and as of 18 April 2023, the drilling contractor’s total backlog stands at approximately US$8.6Bn.

Other drillship

The Petroleum Safety Authority Norway (PSA) has awarded Wintershall Dea consent for exploration drilling in block 6406/2. The aforementioned Transocean Norge  will drill well 6406/2-11 in the Bergknapp prospect. 

PSA recently permitted Wintershall to drill in block 6507/4 in the Adriana and Sabina prospects, which are located in production licence 211 CS and are valid until 2 February 2032.

In the UAE, ADNOC Drilling was awarded a five-year contract to provide integrated drilling services (IDS) totalling US$412M from ADNOC Offshore, commencing Q2 2023. 

ADNOC Drilling will provide IDS for the development of the Upper Zakum field, the largest producing field in ADNOC’s offshore portfolio.

This contract is part of the company’s stated strategy to expand its oilfield services (OFS) business as it looks to double OFS revenues by 2025. 

ADNOC said it expects this contract to add nearly 20% to its annual revenue compared with 2022 and the company expects to generate US$500~US$550M in revenue in 2023.

Restarting production

And Brazilian oil and gas producer Enauta has restarted production from the well 7-ATL-2HP-RJS in the Atlanta field offshore Brazil following the installation of a new pump on the seafloor. 

The company halted production in March, just days after completing preventive maintenance of the water-cooling system of the FPSO Petrojarl I, which works at the field. 

A new three-well drilling campaign kicked off at the end of 2022 to help increase production. Enauta also purchased the FPSO Atlanta (formerly named OSX-2) last year, which will replace Petrojarl I in 2024 when the full development of the Atlanta field commences, originally with six wells, rising to 10 wells by 2029.

In the UK North Sea, operations have resumed at the Shell-operated Pierce Field following an upgrade to the Haewene Brim FPSO. 

A new subsea gas export line has been installed, connecting the unit to the SEGAL pipeline system, which brings gas ashore at St Fergus, north of Aberdeen in Scotland. The upgrade will allow for the production of gas after years of solely oil production.

Haewene Brim ceased production in October 2021 and spent six months in drydock to upgrade it to a vessel capable of producing gas, which had previously been re-injected into the reservoir. 

Peak production is expected to reach 30,000 barrels of oil equivalent per day, which is more than twice the production prior to the redevelopment, with more gas being produced than oil. 

Gas will be sent through the new subsea pipelines while oil will be transported by tanker, as before.

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Source: Riviera