Drilling continues in the North Sea with an overall rig utilization rate of 71.4%.
As natural gas prices increase with demand in the UK, Rory Stewart of Simmons & Co. International predicts additional exploration and development work in the North Sea region, particularly in the southern gas basins of the UK, the Netherlands, and Norway. This will probably bring work for jack up drillers such as Noble Drilling Corp., Ensco, and GlobalSantaFe Corp. Stewart thinks it will also benefit drillers with experience in Norway, such as Smedvig ASA and Transocean Inc.
Odfjell Drilling
Odfjell Drilling AS, based in Bergen, Norway, maintains a fleet of 11 drilling vessels in the North Sea, and has contracted with Keppel FELS Ltd. to build a new Class B jack up for $114 million, to be delivered second-quarter 2006. The company controls three semisubmersible drilling units: Deepsea Bergen, Deepsea Trym, and Deepsea Delta; it has long-term contracts on several North Sea platforms: Njord, Visund, Ekofisk, Grane, Sleipner, Clyde, Claymore, and Fulmar.
The Deepsea Bergen semisub will be performing high pressure/high temperature (HP/HT) work for BP UK on the Ruhm field from third-quarter 2004 to third-quarter 2005, after which the rig is contracted for a 2-year drilling program on the Norwegian continental shelf (NCS) with Marathon Petroleum Norge AS.
Smedvig's West Epsilon deepwater jack up set an open hole drilling record in 2002 for the Dutch operator NAM, drilling a 4,310 m section before setting and cementing 95/8-in. casing (Fig. 1; photo courtesy of Smedvig ASA).
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The Deepsea Trym semisub is contracted to ConocoPhillips through May 2004 for work at the Ekofisk field in the southern NCS. ConocoPhillips has two 3-month options to extend.
The Deepsea Delta semisub is currently on single-well contracts with Marathon Norge (Hamsun), AS Norske Shell (Beluga), and Esso Norge AS (West Cable). In third-quarter 2004, Norsk Hydro will use the rig for an 18-month program on the NCS.
Smedvig
Stavanger-based Smedvig ASA has a fleet of four mobile drilling units, an ultradeepwater drillship, and 11 tender rigs, including the recently completed T-9 tender. Smedvig is the world's largest operator of self-erecting tender rigs.
Smedvig has 100% ownership in two of the MODUs: the West Epsilon deepwater jack up and the West Venture semisub. The company also owns 52.4% of the West Alpha semisub, and 50% of the West Navigator deepwater drillship (jointly owned with Statoil ASA), built in 2000 and named the West Navion prior to 2003.
The West Alpha fourth-generation semisub is under contract to Britannia Operator Ltd. (BOL), Perta AS (a wholly owned subsidiary of Petroleum Geo-Services), and Statoil into the first-quarter 2005 with possible extension into first-quarter 2006.
The West Venture fifth-generation semisub is under contract to Norsk Hydro into third-quarter 2006, with five optional 1-year extensions.
The West Epsilon jack up is under contract to BP into fourth-quarter 2004 (Fig. 1).
The West Navigator drillship was working for a consortium of Amerada Hess, ChevronTexaco, Esso, Statoil, and Woodside Petroleum from second-quarter 2003, but will begin a contract with Woodside Petroleum in April-May 2004 until the beginning of third-quarter 2005.
In 1988, Smedvig purchased Dyvi Offshore, one of the largest operators of mobile drilling units in Norway. In 1990, Smedvig purchased Robray Offshore Drilling Co. Ltd., a tender rig company based in Singapore. In 1997, Smedvig restructured its rig fleet. In November 1998, Smedvig sold its platform drilling operations in the UK sector of the North Sea to Deutag. However, the company intends to maintain its leading position in the platform drilling market in the Norwegian sector of the North Sea.
Smedvig has recently secured contracts for more than $287 millon, prompting CEO Kjell E. Jacobsen to say that the drilling market has "markedly improved."
Transocean
Transocean Inc. updated its fleet contract status as of Mar. 29, 2004, reflecting 10 rigs operating in and around the North Sea. Transocean has seven rigs under contract in the UK North Sea (UKNS), two rigs under contract in the Norwegian North Sea (NNS), and 1 rig scheduled to begin work off Norway in May. Seven Transocean rigs are idle in the North Sea, including two in the NNS and five in the UKNS. Transocean's North Sea utilization rate is 59%.
In the deepwater fleet (4,500-7,200 ft water depth), two semisubmersibles, the Jack Bates and the Transocean Leader, are in the North Sea.
The Jack Bates is under contract to Total SA to work in UK waters, April-June 2004, at $125,000/day. The Transocean Leader will be under contract to Statoil May 2004 to August 2005 to work in Norwegian waters, at $187,000/day.
In the UK North Sea, BP contracted for the Paul B. Loyd Jr. semisub March 2004 through March 2005 for work at $120,000/day. Shell is continuing its use of the Sedco 711 under a new contract beginning March 2004 at $45,100/day. ADTI picked up a contract on the Sedco 704 for March-May 2004 at $55,000/day. EnCana UK Ltd.'s $40,500/day contract for the Sedco 714 runs through April 2004. The J.W. McLean finished a contract for Oilexco Inc. March 2004 at $50,000/day.
In the Norwegian North Sea, Norsk Hydro has been using the Polar Pioneer semisub, January-October 2004, for $110,200/day. From October 2004 to June 2006, Statoil will be using the rig at $172,800/day. Statoil will also continue its use of the Transocean Searcher under a new contract for $111,000/ day June 2004 to May 2005.
Stena Drilling
Aberdeen-based Stena Drilling manages five semisubmersible rigs, three in the North Sea (Stena Don, Stena Spey, Stena Dee), the Stena Clyde drilling in Malaysia for Shell, and the Stena Tay undergoing inspection in the Palermo shipyard in Italy.
Stena Don AS owns the Stena Don rig, built at Kvaerner's Warnow yard in Rostock, Germany, and delivered September 2001.
The Stena Don is under contract to Statoil in the Norwegian sector of the North Sea through 2006 with five 2-year options to extend.
The Stena Spey (previously the High Seas Driller) is under contract to ChevronTexaco, drilling in the UK sector of the North Sea. The Stena Dee is ready-stacked in Rotterdam.
In 1989 Stena acquired Houlder Marine Drilling and in 1996 the company acquired Ben Line Steamers and Atlantic Drilling Co. Ltd.
Stena Drilling is a wholly owned subsidiary of Stena AB, Gothenburg, Sweden.
The Mærsk Innovator advanced harsh environment jack up rig was delivered to the North Sea in 2003 (Fig. 2; courtesy of Mærsk Contractors, part of the A.P. Møller- Mærsk Group).
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Mærsk
Copenhagen-based Mærsk Contractors has a fleet of 11 jack ups, 1 semisubmersible, and six drilling barge rigs. As of Mar. 22, seven Mærsk rigs were in the North Sea, along with two Mærsk FPSO's.
This includes four ultra harsh environment jack ups: the Mærsk Gallant and Mærsk Giant are working off Norway, the Mærsk Innovator is in the UK, and the Mærsk Guardian is in Denmark.
Three harsh environment jack ups are also working in Denmark: Mærsk Endeavour, Mærsk Enhancer (16-month contract by Mærsk Olie og Gas), and the Mærsk Exerter.
The Mærsk Giant is under contract to ConocoPhillips in Norway until November 2004, after which it will drill two wells for Pertra AS on the Varg field.
The Mærsk Innovator is the first of two advanced harsh environment jack-ups ordered by Maersk (Fig. 2). The Mærsk Innovator was delivered to Stavanger Jan. 7, 2003, from Hyundai Heavy Industries Co., Ltd. in Korea. The rig has a 4-year contract, 2004-08, with ConocoPhillips to drill 25 wells over a new wellhead platform on the Ekofisk field in the UKNS.
The second next-generation harsh environment jack up rig, dubbed the Mærsk XL2, is still under construction. It is already scheduled for a 45-day contract by Total Norway to begin immediately after delivery in the North Sea, expected third-quarter 2004.
These two rigs have 205 m (673 ft) legs, capable of working in 150 m water depth in harsh environments, more than 30 m deeper than today's largest jack up rigs. The rigs have 2,500 sq m available deck space and can accommodate a variable deck load of 10,000 tons.
The new design also incorporates a combined blowout preventer (BOP) system that enables surface or subsea operations.
The harsh environment jack up Mærsk Endeavour was used to drill a well to a depth of 28,144 ft and a true vertical depth of 7,419 ft for Mærsk Olie og Gas AS on Dec. 18, 2002, the second longest well ever drilled in the Danish sector of the North Sea.
Mærsk Contractors is part of the A.P. Møller-Mærsk Group.
KCA Deutag
KCA Deutag is the UK's largest drilling contractor, responsible for the operation and maintenance of 34 platform drilling facilities in the UK North Sea.
KCA Deutag operates 13 platforms for BP and 9 for Shell Expro, 5 for Kerr-McGee, 2 for ExxonMobil, and individual platforms for Amerada Hess, BOL (Chevron/Conoco), Chevron, Det Norske Oljeselskap AS (DNO), and TotalFinaElf.
In 1998, Deutag acquired Smedvig's platform drilling activities in the UK and set up a new company, Deutag UK Ltd.
In 1999, Shell Expro awarded the $300 million northern business unit contract to KCA to manage of 9 platform drilling facilities in the UK North Sea.
In 2001, Deutag was purchased by Abbot Group PLC and in October, KCA Deutag Drilling was formed. KCA Deutag is a wholly owned subsidiary of Aberdeen-based Abbot Group PLC.
The Nobel Ton van Langeveld semisubmersible drilling unit was built in Spain in 1979 and is working for Kerr-McGee in the UK North Sea (Fig. 3; courtesy of Nobel Corp.).
Noble Drilling
Noble Corp. updated its fleet status report on Mar. 1, 2004. It has 13 rigs in the US and 44 outside the US, including 8 jack ups and 1 semisubmersible, with 100% utilization in the North Sea.
Six of the eight North Sea jack ups are working in the Netherlands. Two jack ups are working for German operator Wintershall AG: Noble Al White (through July 2004 at $49,000-51,000/day) and Nobel Kalskaya (through June 2004 at $50,000-52,000/day plus options).
Two other jack ups are working for Nederlandse Aardolie Maatschappij (NAM) through April 2004: Noble George Sauvageau ($50,000-52,000/day) and Noble Ronald Hoope ($44,000-46,000/day.
The two remaining Netherlands-based jack ups are working for Gaz de France (Nobel Piet von Ede; $47,000-48,000/day) and BP (Noble Lynda Bossler; $49,000-51,000/day).
Noble Drilling (Denmark) ApS has one jack up, the Noble Byron Welliver, in Denmark working through August 2004 for Maersk at $54,000-56,000/day.
The Noble Julie Robertson jack up is working for Gaz de France in the UK North Sea through April at $44,000-46,000/day, through Noble Drilling (UK) Ltd.
The semisub Nobel Ton van Langeveld finished a contract in March 2004 but will continue work for Kerr-McGee in the UK North Sea (Fig. 3). The new single-well contract for $39,000-41,000/day, effective Mar. 15, contains optional contract extensions for six additional wells.
Ensco
Aberdeen-based ENSCO Offshore UK Ltd. has seven jack up rigs in the North Sea, including three working in Denmark for DONG: Ensco 70 (well to well through May 2004); Ensco 71 (through July 2004 plus options); Ensco 101 (well to well through July 2004).
Ensco 92 is working in the Netherlands for Gaz de France (through March 2004) and Ensco 80 is working in the UK North Sea for ConocoPhillips (through July 2004 plus options).
Two rigs are off contract in the Netherlands, giving Ensco a North Sea jack up utilization rate of 71.4%.
GlobalSantaFe
Houston-based GlobalSantaFe Corp. has 59 offshore drilling rigs. Four semisubs are in the UK North Sea: Arctic II, Arctic III, and Arctic IV (all enhanced Pacesetter L907), and Rig 140 (enhanced Pacesetter 9500).
Arctic II is cold-stacked, Arctic III is under contract until May 2004, Arctic IV under contract until June 2004, and Rig 140 will be working until November 2004. This gives the company a North Sea semisub utilization rate of 75%.
GSF also has seven jack ups in the UK North Sea, including four heavy-duty, harsh environment rigs: Galaxy III (contracted until February 2005), and Monarch (contracted until October 2004); Galaxy I and Magellan are idle.
The company has three other jack ups in the area: Britannia (contracted until October 2004); Adriatic XI and labrador are idle.
With three of seven jack ups under contract, GlobalSantaFe has a North Sea jack up utilization rate of 43%. The overall utilization rate for GSF's North Sea rigs is 55%.
Summary
As of Mar. 22, 2004, 29 of the 31 jack ups in the North Sea were under contract (93.5% utilization), and 21 of the 39 semisubmersibles (53.8% utilization). The overall utilization rate of the 70 offshore rigs in North Sea is 71.4%.