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Statoil contracts West Saturn for Brazil drilling

Written by  OE Staff Thursday, 13 July 2017 03:33

Statoil has contracted rig firm Seadrill Offshore for up to nine wells offshore Brazil, starting on its BM-S-8 license in the Santos Basin.

Seadrill will provide the drillship West Saturn, with services on board by Seadrill Serviços de Petroleo Limitada, for one exploration well on the Guanxuma prospect and a drill stem test on the pre-salt Carcará discovery, with options for up to seven more exploration wells. Drilling is expected to start in Q1 2018.

The BM-S-8 license, in which Statoil increased its interest by 10% yesterday, to 76%, contains parts of the Carcará pre-salt oil discovery.

“If we are successful, Guanxuma could be another significant discovery in this highly prolific basin,” said vice president for exploration in Brazil, Ana Serrano Onate. 

“Testing the Carcará discovery will provide important information for developing the field. In addition, Statoil is evaluating its options for the Northern open area licensing round, expected in October 2017. We believe Statoil is well-positioned for future operatorship of a unitized Carcará field,” said Anders Opedal, country manager for Brazil.

“Securing this optional rig capacity demonstrates Statoil’s commitment to follow-up on potential exploration success in the 2017-2018 program,” Opedal added.

Statoil's assets in Brazil include the Peregrino heavy oil field in the Campos Basin and assets in the exploration and development phase. 

The West Saturn is a 6th generation ultra-deepwater drillship, built in 2014 and equipped to drill in water depths of up to 12000ft (3600m). The West Saturn will be upgraded with a managed pressure drilling system which is expected to be utilized as part of the upcoming work scope. 

Noting that the West Saturn is the fourth idle ultra-deepwater floater to be contracted this week, Evercore ISI analysts say they continue to believe the floater market is bottoming, and view the return of an international oil company to a geopolitically challenged market as a positive for the offshore rig market.

Citing data from IHS-Petrodata, Evercore ISI reported that the estimated contract start date is 1 December 2017 and estimated end date is 29 January 2018, with the implied 60 day duration translating to a day rate of $433,000, well above Evercore ISI's $155,000/day estimate for the 12000ft drillship, based on its most recent one-well contract with Ophir Energy.

The dayrate likely includes some mobilization (assume $15 million for a clean $183000/day rate) and reimbursement for a managed pressure drilling system upgrade, but Statoil has seven unexercised options on the West Saturn, potentially taking the rig through August 2018 per IHS-Petrodata estimates, Evercore ISI noted. While the headline $433,000 day rate should be discounted, 11 of the 16 contracts announced so far this month have been for floaters, and the industry is on pace to extend its positive year-over-year contracting streak for a seventh straight quarter.

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