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GULF OF MEXICO
significantly year-over-year. Evercore ISI’s
US Drilling Permit Monthly report of April
2016 found a total of 13 new offshore permits, which it found to be “on par with
the March and February figures.” However,
the total is down 28% from April 2015.
New bypass permits halved from eight to
four, an indication of better execution in new
well drilling and development, according to
the report. Similarly, new well permits grew
50%, from four in March to six in April.
Although ultra-deepwater permits have
remained constant, this number did not
necessarily reflect the full picture the sector
faces, Evercore said. “New ultra-deepwater
and midwater permits increased month-to-
month, but have fallen 50% year over year,”
the report noted. “Ultra-deepwater permits
have remained relatively consistent due to
their infrequency, although ultra-deepwater
plans have all but evaporated heading into 2Q
However, the sharpest decline year-over-
year has been in shallow-water permitting,
the report found, down 89% from this time
last year, with just three total new permits
issued for shallow water wells.
“Offshore drilling will continue to show
anemic movement as long as shallow-water
permits remain at historically low levels,”
the report commented. “Hopefully, better
permitting and a marginal increase in exploration plans offshore will buoy rig activity in
the Gulf of Mexico, particularly heading into
what we predict will be an offshore capex
bottom in 2H 2016.”
Nevertheless, some work is going forward. Ensco says that retrofitting two of its
semisubmersible drilling rigs has enabled
it to find new work in the Gulf and keep its
crews busy. By upgrading the mooring capabilities of the ENSCO 8503 and the ENSCO
8505, the DP-enabled semis are now capable of both drilling and intervention work in
both deep and shallow-water areas.
And, with operators taking advantage of the
market downturn to perform intervention and
P&A activities, Ensco says it has won contracts
from Marubeni Corp. and Stone Energy Corp.
as well as a sublet from Apache for this type of
work by upgrading the two semisubmersibles.
“Currently, none of our customers are doing exploration,” said Jason Morganelli, VP-Marketing, Western Hemisphere for Ensco.
“The intervention market represents the
majority of work going on in the Gulf these
days.” And it was feedback from operators
that led Ensco to retrofit the two semis so
that they could undertake this type of work.
The ENSCO 8505 has been working for
Marubeni in the US GoM since last Decem-
ber under a contract that will run until Janu-
The ENSCO 8503 has been working for
Stone Energy in the Gulf under another multi-
year contract. The primary contract, announced
in October 2014, has a term of 30 months, and
work began in 2Q 2015. The contract permits
Stone to exercise options to extend the term up
to an additional 12 months.
Elsewhere, Transocean reported in Feb-
ruary that its newbuild ultra-deepwater drill-
ship Deepwater Thalassa started its 10-year
contract for Shell in the deepwater Gulf. The
rig is designed to operate in up to 12,000 ft
water depth and drill wells to 40,000 ft.
And, at the end of January Chevron had
moved Transocean’s Deepwater Asgard
drillship to the deepwater Tiber prospect in Keath-ley Canyon block 102. The Deepwater Asgard,
built in 2014, started a two-year contract with
Chevron in April 2015. Like the Deepwater Thalassa, the Asgard can work in water depths down
to 12,000 ft and drill down to 40,000 ft deep.