Oil and gas company BW Energy has bought two jack-up drilling rigs from Borr Drilling. The company will use a converted rig for the development of the Hibiscus/Ruche satellite field in the Dussafu license offshore Gabon.
BW said that using a converted jack-up rig would reduce investments and time to first oil.
BW Energy has acquired two jack-up drilling rigs, the 2003-built sister-units “Atla” and “Balder”, from Borr Drilling for $14.5 million for the two units.
“A jack-up conversion will enable us to reduce capital investments by about USD 100 million compared to our previous development plan,” said Carl Krogh Arnet, the CEO of BW Energy. “We are benefitting from the availability of high-quality jack-up units at very attractive prices due to the current drilling market slump. By re-using facilities we will also achieve a substantial reduction in field development related CO2 emissions compared to a newbuild platform.”
The seismic reprocessing carried out by BW Energy has indicated the potential for a substantial increase to the Greater Hibiscus oil-in-place volumes, making further developments in the Hibiscus/Ruche area highly likely, the company said.
“This development concept offers tangible financial, schedule and environmental benefits. We have consequently decided to secure a second jack-up at a very attractive price to prepare for the future development of the Dussafu license,” said Carl Krogh Arnet. “Acquiring a sister unit will enable us to re-use the engineering and project plans for a second development with obvious synergies.”
Calculations show that redeployment and conversion projects offer 70%-80% reductions to greenhouse gas emissions compared to newly built assets due to reduced steel consumption and shorter yard stays. Further tangible benefits are reduced installation cost as a jack-up can “self-install” after mobilization to the field and there is no need for piling into the seabed for stability.
The new development plan is expected to lower the estimated cash-break even oil price for the Hibiscus/Ruche (phase 1 and 2) development to approximately USD 25 per barrel Brent. With the planned increased production from Hibiscus/Ruche, the Dussafu license production cost, including the Tortue field, is expected to drop to approximately USD 11 per barrel. A final decision to restart the Hibiscus/Ruche development is subject to a lifting of COVID-19 restrictions to allow for efficient project execution, BW Energy said.
The initial FID approved for the Hibiscus/Ruche development was approved in the fourth quarter of 2019 with an estimated gross development cost of about USD 660 million for both phases and proven resources (2P) of gross 112 million barrels of recoverable oil.