| October 18, 2010
Rig Utilization Total mobile rig utilization in the Gulf of Mexico declined this week as a non-contracted jackup was moved into the US Gulf. Currently, fleet utilization stands at 48.3%, with 58 of 120 mobile rigs under contract or committed for work. Marketed utilization, which excludes cold stacked and other non-marketed rigs, fell to 76.3%, with 58 of 76 rigs under contract. Within the jackup fleet, total utilization stands at 37.8%, with 31 of 82 rigs under contract or committed for work. Jackup ENSCO 69 arrived at Sabine Pass from Trinidad and Tobago, which accounted for the additional unit. Marketed utilization is unchanged, now at 67.4% with 31 of 46 units contracted. Floating rig utilization is unchanged this week. Overall, 27 of 32 rigs are under contract, for utilization of 84.3%. Meanwhile, marketed utilization changed slightly as Noble Corporation sent semi Noble Amos Runner out to replace the semi Noble Lorris Bouzigard on its contract with LLOG Exploration Company, then cold stacking the Bouzigard. As a result, marketed utilization is at an even 90%, with 27 of 30 units contracted. Platform rig fleet utilization fell to 25.4%, with 13 of 51 units under contract, while marketed utilization dropped to 37.1%, with 13 of 35 rigs contracted. Inland barge utilization declined as one previously contracted rig was released. Overall, utilization stands at 56.8%, with 33 of 58 units under contract, while marketed utilization is 80.5%, with 33 of 41 units under contract. Headline News Secretary of the Interior Ken Salazar has deemed it appropriate that deepwater oil and gas drilling resume, provided that operators comply with all existing rules and requirements, including those that recently went into effect, and demonstrate the availability of adequate blowout containment resources. Secretary Salazar reached his decision after reviewing a report from Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEM) Director Michael R. Bromwich and considering other information. As had been speculated for some time, the government’s deepwater drilling moratorium was ended early on October 12. However, uncertainty as to when drilling operations will begin in earnest remains the major question. Most seem to believe it will not be a speedy process, but rather more of a phased start-up. However, given the low level of permitting that has occurred in <500 fsw water depths, it would not seem that a return to normalcy in the deepwater drilling market is anywhere close. Nevertheless, reports indicate that a few major operators are “ready to go” and believe they have satisfied the regulatory and other requirements necessary to enable permits to be issued. However, navigating through the Department of Interior’s (DOI) 111-page Final Drilling Safety Rule, which was officially issued on October 14, could also impact the process, although most of the new rule’s provisions were already required under NTL N05 and N06 issued earlier this year. In the end, it is probably safe to say a handful of permits will likely be approved in the coming months, but look for it to be sometime in 2011 before the pace noticeably picks up. Operator News Shell Offshore, Inc. awarded a contract to Dril-Quip, Inc. to supply drilling and production equipment for the Olympus Tension Leg Platform (TLP) to be installed in the Mars field located in the Mississippi Canyon area. The Olympus TLP is part of the Mars B Project. Shell Upstream Americas plans to support Phase II of the Parque das Conchas (BC-10) project off the coast of Brazil. This phase will develop the fourth field in the BC-10 block. The full project will recover more than 300 MMboe of oil and natural gas, with production projected at 100,000 boe/d. Driller News Seahawk Drilling, Inc. completed its contract with Hilcorp Energy Company with jackup Seahawk 2601 late last week, and the company has now moved the rig to Ship Shoal 181 to begin a newly awarded, one-well-plusoptions contract with Chevron. The initial well is expected to last around 40 days, keeping the rig busy to the second half of November. Option exercise is likely, but dependent on Chevron receiving permit approvals. Jackup Seahawk 2600 will wrap up operations for Tarpon Oil & Gas Company in East Cameron 240 in about a week. Reports are that Tarpon is trying to get a permit approved to keep the rig for an additional well, the status of which is not yet known. Meanwhile, jackup Seahawk 2007 will complete its contract with Breton Energy, LLC later this week, but it is understood Seahawk will shortly have follow-up work in place for the rig. Details will be published when they become available. Jackup Seahawk 2001 will also finish work in Ship Shoal 63 with PetroQuest Energy, Inc. late this week. The rig will then be moved to South Timbalier 56, where it will undergo required regulatory and survey work that will keep it out of commission until about mid-November. Finally, jacking system repairs on jackup Seahawk 3000 are scheduled to be completed November 14, after which the rig will go to the East Cameron area for a 10-14 day project with Energy XXI U.S.A., Inc. That will be followed by a 40-day contract with Badger Oil Corporation and then a five-well, 150-day contract with Arena Energy, LLC, making the rig next available in May 2011. Phoenix Exploration Company has taken jackup Hercules 150 for a well in West Cameron 269, pre-empting the start of a previously awarded LLOG well. The rig, which recently completed a contract with Hilcorp in Ship Shoal 108, was slated to go to LLOG’s location in West Cameron 31, but the operator allowed Phoenix to take the rig instead. The jackup will go to LLOG after the Phoenix work is completed, but the work could be switched to another Hercules jackup. The 150 is also scheduled for a 20-day well with Apache in East Cameron Block 2 before it returns to Hilcorp Energy for further work. Meanwhile, Phoenix now also has jackup Hercules 251 on location in Main Pass 59 for the start of a 40-day (dry hole) well, with Transocean Ltd.’s ADTI providing turnkey services. Hercules now has 10 of its 11 marketed jackups under contract, and that will change shortly to 100 percent, as reports indicate currently idle Hercules 201 will have a deal in place soon. While full details are not yet known, it is believed ADTI will turnkey the well. On the inland barge front, Hercules 17 has received another contract extension from Energy XXI. The rig is now under tow to South Pass Block 11 for the 30-day well. In addition, Gulf South Operators, Inc. has picked up Hercules 41 for a 35-day well. The rig has just arrived on location, with operations keeping it busy well into the second half of November. Noble removed the Noble Lorris Bouzigard from its location in Mississippi Canyon Block 503 and replaced it with the previously idle Noble Amos Runner. The Runner went on day rate October 14 and will remain on the contract with LLOG for the remainder of the term, which ends in late June 2011. Noble also reports it has reached agreement with Pemex on a fast-track tender to extend the contract for jackup Noble Lewis Dugger for another 28 days, from October 18 to November 15. Pemex currently has three additional fast-track tenders out for bid. The fasttrack tender has replaced what used to be called a direct assignment contract, which is no longer offered. Future plans for jackup ENSCO 69 are unknown. ENSCO, PLC regained control of the rig in August and moved it from Venezuela to Trinidad. ENSCO terminated its contract with PDVSA in June 2009 due to non-payment; operations were taken over by PDVSA unit Petrosucre. Diamond Offshore Drilling, Inc. completed its P&A contract in Ewing Bank 948 with Energy XXI, and semi Ocean Victory has been moved back to Diamond’s stacking location in West Cameron 184. The rig is due to return to its contract with ATP Oil & Gas Corporation in November, but start of that work will depend on the permit approval process. Service/Supply News Tidewater, Inc. has entered into a contract with Drydocks World for the construction of four 265-ft deepwater platform supply vessels at its shipyard in Batam, Indonesia. The delivery of these vessels is estimated to begin in April 2012 and conclude in late 2012. CapRock Communications announced a multi-year contract extension to provide VSAT communications to Diamond Offshore, Inc.’s fleet located in the Gulf of Mexico. |