General Thoughts, page-4128

That's the question...

What next for the two star performing deepwater rigs in Namibia?

"The owner of two of the deepwater drilling rigs that have been star performers in Namibia is seeking new work for the units in the second half of this year. The semi-submersible drilling rigs Deepsea Bollsta and Deepsea Mira have achieved tremendous results with Shell and TotalEnergies in Namibia, and are available for new contracts. The owner, Norway’s Northern Ocean, said in its first quarter report that Shell had decided on 1 May to terminate the drilling contract with Deepsea Bollsta “for convenience and compensate with standby rate until June 10”. The rig has transited to Walvis Bay in Namibia, and is undergoing a special periodical survey, with availability after mid-July 2024.

The Deepsea Mira continued to operate under its drilling contract with TotalEnergies in Namibia in the first quarter, and has transited to Congo-Brazzaville, where it has started drilling operations for TotalEnergies. The current firm term of that contract ends in October 2024. Jonas Ytreland, the company's chief financial officer, told Upstream that both rigs are being bid for new work in West Africa and on the Norwegian Continental Shelf. "We are open to working in both locations where we can achieve the best economic outcomes."

There are opportunities in West Africa starting in the second half of 2024 and in Norway starting in 2025, and the company said it is confident in its ability to continue obtaining profitable contracts. In terms of the impact of idle rigs on Northern Ocean’s financial wellbeing, Ytreland said it was unclear what any constraints might be given the unknowns around the length of any idle periods. He was confident the company would be able to finance its loan obligations and working capital in the next 12 months. Market sources told Upstream that Chevron could be looking for a rig in Namibia from the fourth quarter 2024 or first quarter 2025. Galp, Shell and TotalEnergies will need multiple rigs for further exploration and appraisal work plus, eventually, development drilling.

Northern Ocean said in its recent 2023 Annual Report the two deepwater rigs have proven their ability in Namibia to drill at water depths exceeding 3000 meters "and withstood severe weather and sea conditions this past winter with very minimal impact on performance efficiencies". The two rigs are managed and operated by the Norwegian company Odfjell Drilling."