Esgian Week 32 Report: Second Round of Saudi Jackup Suspensions

Esgian provides an update on the second round of jackup suspensions in Saudi Arabia in its Week 32 Rig Analytics Market Roundup.

Report Summary

Contracts

Arabian Drilling has confirmed that Saudi Aramco has initiated discussions with the drilling contractor over the suspension of an additional leased offshore rig, following an initial round of contract suspensions that began earlier this year. Arabian Drilling has not stated which of its jackups is the target of the current suspension discussions.

ADES does not expect new contract suspensions for its fleet by Saudi Aramco this year. Meanwhile, the company expects to secure new contracts for the remaining two rigs previously suspended by Aramco by the end of 2024.

Arabian Drilling has stated that leasing rigs to be able to return them with minimum financial impact has been part of its strategy, acting as a buffer in case of a softening market.

Diamond Offshore received a notice of early termination from an operator on 31 July 2024, related to a previously announced one-well campaign offshore Cote D’Ivoire with 12,000-ft drillship Ocean BlackRhino.

Northern Ocean has announced an extension of the contract with TotalEnergies for continued work in Africa, using the 10,000-ft semisub Deepsea Mira.

Drilling Activity and Discoveries

Petrobras reported Monday that it had reached the main target of the Uchuva-2 well offshore Colombia and confirmed the extent of the gas discovery made in 2022 with the drilling of the Uchuva-1 well.

Tullow Oil and its partners plan to conduct a new 4D seismic survey at the Jubilee field offshore Ghana in early 2025.

Noble 12,000-ft drillship Noble Venturer has completed the first infill well on Block G offshore Equatorial Guinea for Trident Energy. Partner Kosmos Energy said that initial results of the first infill well were positive.

China's CNOOC has informed that the Chinese government authorities have approved the proved gas in-place of the Lingshui 36-1 gas field, which stands at over 100 billion cubic meters. The field has been described by CNOOC as "the first large-size ultra-shallow gas field in ultra-deep water in the world."

Petronas stated on Thursday that one 'notable' oil and gas discovery was made in May 2024 at the Bekok Deep-1 well offshore Malaysia.

Talos Energy anticipates receiving Seadrill’s 12,000-ft deepwater drillship West Vela late in the third quarter of 2024 to begin drilling three consecutive high-impact subsalt wells in the US Gulf of Mexico, including the Katmai West #2 appraisal in 2024, followed by the Daenerys and Helms Deep prospects in 2025.

Malaysian company Petronas reported on Thursday that it had recently achieved success with the Sloanea-2 appraisal well in Block 52, Suriname.

Harbour Energy has reported that preparations are well advanced for the appraisal of the Kan oil discovery located in Block 30 offshore Mexico, with drilling scheduled to begin in the third quarter of 2024.

Occidental Petroleum Corporation (Oxy) has made a discovery at the Ocotillo exploration well in Mississippi Canyon 40 in the US GOM. Murphy Oil, Oxy’s 33.33% partner in Mississippi Canyon 40 where the well is located, shared the news on Thursday in its quarterly report.

US oil firm Murphy Oil is preparing to start its two-well offshore exploration program in Vietnam in Block 15-2/17 and Block 15-1/05.

The Norwegian Offshore Directorate (NOD) has granted Equinor a drilling permit for a wildcat well in the North Sea offshore Norway.

Demand

U.S. oil and gas major Chevron, along with its partners NewMed Energy and Ratio Energies, has approved a $429 million investment to enter the Front-End Engineering Design (FEED) phase to expand the production capacity of the Leviathan gas field offshore Israel.

Speaking during the company’s Q2 2024 call, executives at Transocean commented on the strength of the Norwegian market, with customers contracting harsh environment rigs for Norway up to four years in advance.

Harbour Energy has informed that the partnership in the Zama project offshore Mexico will look to tender the major contracts to secure refreshed cost and schedule estimates ahead of a final investment decision (FID) once the front-end engineering design (FEED) phase has been completed.

Indian national oil company ONGC has cancelled a tender for four jackups and returned the bid bonds to participating companies.

Murphy Oil stated that it has identified multiple exploration opportunities in Côte d'Ivoire, and was expecting to receive final data from a seismic reprocessing program for its blocks by the end of 2024.

Australia's Finder Energy has agreed to acquire an interest in an offshore license in Timor-Leste that contains four discovered but undeveloped oil fields. Finder has entered into conditional sale agreements with Eni and Inpex to acquire a 76% interest in, and operatorship of, PSC TL-SO-T 19-11 (PSC 19-11) offshore Timor-Leste.

Mobilisation/Rig Moves

The 12,000-ft drillship Abdulhamid Han, a 7th generation drillship owned by Turkish national oil company Türkiye Petrolleri Anonim Ortaklığı (TPAO) is moving to the Black Sea for a drilling campaign to boost production from the Sakarya natural gas field.

Seadrill expects drillships West Auriga and West Polaris to begin long-term contracts with Petrobras in December 2024.

Beacon Offshore Energy’s work in the US GOM with the 12,000-ft drillship West Vela under the management of Diamond Offshore is expected to end in late September 2024.

Rig Sales

Diamond Offshore has classified its cold stacked semisubmersible Ocean Valiant as held for sale.

Other News

The Namibian Ministry of Mines and Energy has agreed to an extension of the initial exploration period of offshore license PEL 96 for Tower Resources, extending it to 31 October 2024 and inviting the company to apply to enter the first renewal period of PEL 96 for a period two to three further years.

Seadrill has reported a second-quarter 2024 operating profit of $288 million and adjusted EBITDA of $133 million on $375 million of total operating revenues.

UAE-based ADNOC Drilling's jackup rig business unit saw its revenue for the second quarter increase by 48% year-on-year, reaching $284 million from $192 million.

Diamond Offshore posted a lower net income for the second quarter of 2024 compared to the previous quarter of the year, as its revenues decreased due to the West Auriga drillship returning to Seadrill after the expiration of its charter.

Advent Energy’s subsidiary, Asset Energy, the operator of the PEP-11 exploration permit in the Sydney Basin, NSW, Australia, is seeking judicial intervention to expedite the decision-making process for the joint venture’s applications related to the permit, which is prospective for natural gas.

Perth-based companies deepC Store and Azuli International have been awarded offshore Greenhouse Gas Assessment Permits in the Bonaparte and Browse Basins offshore Australia.

Diamond Offshore is actively marketing its 3,000-ft semisub Ocean Patriot for opportunities in the North Sea in 2024 to fill the gap before its new, three-year contract in early 2025.

The Norwegian Ocean Industry Authority (Havtil) has carried out further audits on COSL’s 4,921-ft semisub COSLProspector.