(OM) Two key Equinor field development projects offshore Brazil are driving deepwater rig contracting activity, according to Evercore ISI’s latest Offshore Rig Market Snapshot.
Recently,Valaris announced that it will be reactivating the DS-17 for a new 540-day contract with Equinor for offshore Brazil. The $327-million contract value includes $86 million in upfront reimbursements for mobilization, reactivation, and upgrades.
The clean daily operating rate of $446,000/day includes managed pressure drilling services, ROV, casing running, slop treatment and cuttings handling. Preservation-stacked since April 2020, the seventh-generation drillship is expected to commence work on Equinor’s presalt Bacalhau field development project in mid-2023, joining Seadrill’s West Saturn.
The $8-billion Bacalhau project was sanctioned in June 2021 based on a $60/bbl oil price and has a $35/bbl breakeven. Schlumberger’s Subsea Integration Alliance was awarded the EPCI for the subsea production system (wellheads, controls, connection systems, and a completion workover riser) and pipelines (rigid risers, flowlines, and umbilicals), with Modec to provide an FPSO to produce 220,000 b/d of oil and 15 MMcm/d of natural gas from 19 wells starting in 2024.
Separately, Equinor awarded TechnipFMC a FEED study for the BM-C-33 presalt project offshore Brazil. The potential $1-billion plus award covers both the SPS (trees, manifolds, jumpers, rigid risers), SURF (flowlines, umbilicals, pipeline end terminations), subsea distribution and topside control equipment, and life-of-field services, with an FID as early as early 2023.
The report notes that three deepwater projects totaling nearly $14 billion in capex have been sanctioned year-to-date, while another 11 projects worth over $40 billion in capex could be approved later this year. “Meanwhile we expect contracting activity to continue to be dominated by jackups in the near term as 38 units are scheduled to roll including seven with Pemex and three with ONGC, versus a modest 13 floaters,” the report said.