Royal Dutch Shell has terminated its contract for the Noble Discoverer drillship.
Alongside Transocean Polar Pioneer semisubmersible rig, Discoverer was part of Shell’s Chukchi Sea exploration drilling program that folded in September, 2015.
The drillship is now in transit to Singapore where it will be stacked. Shell will pay Noble for the remaining term at 90% of the operating dayrate.
The Noble Sam Croft and Noble Tom Madden rigs remain under contract into July 2017 and November 2017, respectively, with Freeport-McMoRan Oil & Gas, which recently reported plans to reduce its number of rigs operating in the Gulf of Mexico.
Noble says it’s in discussions with Freeport-McMoRan on possible restructuring of the contracts.
Greenpeace opens another bottle of champagne.
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Progress In The Arctic
Wood Mackenzie
From Rigzone, December 18, 2015.
The Arctic continental shelf is one of the least explored geological basins and has the potential for significant hydrocarbon discoveries.
Total estimated resources are comparable with those of the prolific West Siberian basin.
Interest from both International and National Oil Companies had grown over the past few years – bolstered by support from several Arctic governments. This has slowed recently as a result of a far lower oil price. However, it is not price alone which means progress will continue to stall in this region. Difficulties arising from insufficient geological knowledge, lack of infrastructure, harsh climatic conditions, the need for investment in new E&P technologies, and environmental concerns will all be factors.
The highest profile action in the Arctic recently has been Shell's decision not to progress its plans in the US' Chukchi Sea. Regulatory uncertainty and hurdles were major reasons behind its decision.Norway
- Norway's West Barents Sea Basin holds 45% of all Norway's offshore undiscovered resources
- around 6 billion boe
- Norway: leading region for Arctic exploration; favorable climatic conditions
- 150 wells since exploration began in 1970
- a quarter of those wells in last three years
- 2011: several discoveries added 1 billion boe
- mostly Statoil, but also LUKOIL, Rosneft, Wintershall, E.ON, Lundin Petroleum
- companies must create a joint venture with one of the approved companies (Rosneft, Gazprom, GazpromNeft
- Rosneft/XOM drilled the Universitetskaya well in 2040; short ice-free season precluded driling to depth; predominantly gas; 4 billion boe
- pretty much no activity
- USGS estimates Arctic coastal shelf contains 30% of undiscovered oil resources in the region, or about 27 bioe
- high-profile Shell project canceled in 2015
- US to cancel 2016/2017 lease sales due to likely lack of adequate interest
- explored unevenly
- 26 discovered fields in the Beaufort-Mackenzie basin; at current prices, uneconomic
- discovered fields from the Franklinian-Sverdrup Basis also uneconomic
- their offshore basins remain some of the most underexplored Arctic regions
- Southwest Greenland Basin, estimate: 2.3 billion boe
- despite exploration all the way back to the 1970s, not a single discovery has been made
- no sign of recover in the near-term
- Statoil relinquished three exploration licenses in January, 2015, despite having an exploration term of 16 years and the government's proposal to postpone work commitments deadline by two years
- most exploration where areas are completely (Norway continental shelf) or mostly (eastern part of the Barents sea) ice-free on a seasonal basis
- Prirazlomnoye project stands out: its stationary platform is capable of withstanding millions of tonnes of ice, as successfully demonstrated last winter: hefty price: $2 bilioin on the the platform alone
- year-round sea logistics requires an icebreaker fleet, which adds to operating costs; presently only Russia has a suitable fleet
- US has two functioning icebreakers, but only one in the Arctic
- Norway announced construction of its first non-military icebreaker for research to be completed by 2016
- neither Greenland nor Canada have icebreakers; nothing estimated to commence until 2020
- therefore, full-scale, year-round exploration and production in the Arctic is only possible on Norway's continental shelf and the western part of Russia's shelf
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