More drilling work in Namibia: Rig’s Shell gig done but another one pops up

Offshore drilling contractor Northern Ocean has found a new assignment off the coast of Namibia for a semi-submersible rig, which recently finished its job with the UK-headquartered energy giant Shell.

Following its transit from Norway to Namibia, the Deepsea Bollsta rig has been operating within the Orange Basin in Namibia for 18 months . Within its results for the first quarter of 2024, Northern Ocean disclosed that Shell elected on May 1, 2024, to terminate the rig’s drilling contract for convenience and compensate with a standby rate until June 10.

Afterward, the rig transited to Walvis Bay in Namibia to perform its special periodical survey (SPS). As a result, the semi-submersible remained available for hire post-mid-July 2024 and the rig owner was engaged in active discussions with potential customers in the West Africa region and harsh environment markets for short and long-term contracts with potential start date in the second half of 2024.

In an update on June 26, Northern Ocean disclosed a new contract award for the Deepsea Bollsta rig in Namibia’s waters with a subsidiary of an undisclosed company said to be a major operator. The one-well contract, which is estimated to take 63 days, will likely begin in the fourth quarter of 2024. Before kicking off its new contract, the rig will undertake a five-year class survey and there will also likely be a short idle period prior to commencement.

With Odfjell Drilling managing its two high-specification rigs, Northern Ocean believes it has established itself in West Africa and that the Deepsea Bollsta semi-sub continues to demonstrate the efficiencies of utilizing a sixth-generation semi-submersible in this region.

The 2020-built Deepsea Bollsta sixth-generation semi-submersible rig is of Moss CS60E design and can accommodate 140 people. The rig can carry out operations in both benign and harsh environments at water depths of up to 3,000 meters.

During the first quarter of 2024, the firm’s other semi-submersible rig, Deepsea Mira , continued to operate under its drilling contract with TotalEnergies in Namibia. After the quarter ended, the rig moved to Congo under the drilling contract where it embarked on drilling operations for the French energy heavyweight. The current firm term of the drilling contract ends in October 2024.

With the new contract award for the Deepsea Bollsta rig in the bag and the current drilling contract for the Deepsea Mira rig still ongoing, the offshore drilling player has an estimated aggregate revenue backlog between $80 million and $95 million, excluding bonuses, reimbursable and undeclared options.

“While the current operations are focused on exploration and appraisal wells, with resulting short-term programs and potential lulls in demand in the near term, the success of the exploration bodes well for significant future development opportunities in Namibia. In Norway, Canada and other harsh environment basins, early indications of increasing activity levels are observed,” highlighted Northern Ocean two weeks ago.

“In Norway, any increase in activity, coupled with the recent departure of several drilling units from Norway, will challenge a delicately balanced market and will likely lead to a requirement for incremental supply. The company continues to actively pursue these opportunities in Norway and elsewhere.”

Given its determination to secure further backlog with premier clients globally, the rig owner continues to be in discussions and processes with potential clients concerning securing additional backlog for both rigs.