Fresh contracts pour in for offshore rig owners as market continues to recover

Rig contractors say they are beginning to see early signs of a recovery in the offshore drilling market following last year’s downturn. Contractors are reporting that confidence is picking up among their oil company clients in terms of budgeting capital, and this in turn is triggering an uptick in future rig demand.

In its latest results statement, Seadrill reported that during the first half of 2021 opportunities increased for floaters, especially drillships, with take-up in the traditional ‘golden triangle’ across the Atlantic Ocean breaching 80%.

The company said that it has three harsh-environment rigs operating in the North Sea. The semisubmersible West Hercules continued work for Equinor while the jackups West Elara and West Linus have both been on long-term contracts with ConocoPhillips. In addition, the semisubmersible West Phoenix was mobilizing for a new contract offshore Norway with Vår Energi.

Three of Seadrill’s drillships have been operating in the Americas, with the West Neptune under contract to Talos Energy in the Gulf of Mexico, and the West Tellus and West Saturn working off Brazil for Petrobras and ExxonMobil, respectively.

In addition, the semisubmersible Sevan Louisiana is contracted to operate for Walter Oil and Gas in the US Gulf of Mexico and the drillship West Gemini should start work off Angola later in the year.

As for Seadrill’s jackups, the AOD I, AOD III, and West Callisto continued operations in the Middle East for Saudi Aramco, with AOD II also resuming work on July 1.

The West Castor, West Telesto, and West Tucana were on bareboat charter to Seadrill’s joint venture in Qatar, GulfDrill.

Equinor has awarded the Aquadrill drillship West Vela a new contract in the US GoM, with Seadrill set to continue managing the rig until mid-2022.

Valaris is also reporting signs of a market recovery. The company recently issued an update on its offshore drilling rig fleet, which included a number of contract awards. TotalEnergies has awarded the drillship Valaris DS-11 an eight-well contract in the US GoM. The contract is expected to start in mid-2024. The estimated duration is three and a half years. The contract contains early termination provisions should the project not receive a final investment decision. Occidental has awarded the drillship Valaris Resolute a two-year contract in the US GoM. It is expected to run from May 2022 to April 2024.

Woodside has awarded the semisubmersible Valaris DPS-1 a 420-day contract offshore Australia. The contract is expected to start in January 2023 but is subject to the project receiving a final investment decision. The rig is expected to start a 16-well contract offshore Australia with Woodside in March 2022.

Santos has awarded the semisubmersible Valaris MS-1 a one-month contract offshore Australia. The contract is expected to run from April 2022 to May 2022.

TotalEnergies has awarded the drillship Valaris DS-10 a one-well contract offshore Nigeria. It is expected to start in July 2021 and end in October 2021. The estimated duration is 92 days.

Shell has awarded the Valaris DS-10 a six-month contract offshore Nigeria. It is expected to run from March 2022 to September 2022.

In addition, the drilling contractor revealed in its 2Q results that it has received more than 20 new contracts or extensions totaling more than $1.3 billion of backlog.

Meanwhile, Transocean reports that it has received contracts in recent months.

Hess has awarded the ultra-deepwater drillship Discoverer Inspiration a nine-well contract in the US GoM. The contract is expected to run from September 2021 to April 2022. 

BHP has exercised a one-well option for the ultra-deepwater drillship Deepwater Invictus in the US GoM. The contract is expected to run from August 2021 to January 2022. 

TotalEnergies has exercised a 370-day option for the ultra-deepwater drillship Deepwater Skyros offshore Angola. The contract is expected to run from December 2021 to December 2022.

Brunei Shell Petroleum has awarded the ultra-deepwater drillship Dhirubhai Deepwater KG2 a one-well contract, plus two one-well options. The contract is expected to start in December 2021.

Petrobras has awarded the ultra-deepwater drillship Petrobras 10000 a two-year contract offshore Brazil. The contract is expected to run from October 2021 to October 2023.

Offshore Mag