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Exxon Mobil Corp is prepared to bid for new blocks in Brazil’s deep-water oil fields, a focus area for its oil and gas production growth, people familiar with the matter said.
Any bid would mark its first big investment since it decided to resume spending after a historic, $22.4 billion annual loss in 2020. The auction could see more than one consortium emerge with 11 companies registered to participate. Others signed up include Royal Dutch Shell, TotalEnergies and Chevron.
If both fields on offer are awarded, they could raise Brazil output by 12% and bring in almost $40 billion in investment over the next decade, Brazil’s Energy Ministry said on Monday. State-oil firm Petroleo Brasileiro, which made the discoveries, would receive $6.2 billion for past investments.
Exxon has held meetings with Petrobras as recently as last week over a potential partnership to develop Sepia and Atapu that would have Petrobras as operator and Exxon as a large stake holder, the people said. A subsidiary of Portugal’s Galp Energia, Petrogal, also is weighing a minority partnership in a 3-way deal, the people said.
Exxon declined to comment, citing business strategy reasons. Petrobras and Petrogal did not comment.
A new Petrogal partnership with Petrobras would extend their existing relationship at the nearby Sepia East oilfield, said Marcelo De Assis, head of Latin America Upstream Research at consultancy Wood Mackenzie.
People close to the negotiations said a second consortia, without Petrobras participation, also could bid for the Sepia field.
Shell, TotalEnergies and Petrogal would be “the top candidates” for the smaller, Atapu block as they already have developed an adjacent area with Petrobras, Assis said.
Second Bite at Auction
This is the second time Septia and Atupu are on offer. They were put for sale in 2019 in an auction Exxon was prepared to bid for a 45% stake in the main block, called Buzios - in partnership with Petrobras, said the people who declined to be identified because the information is not public.
Buzios today is producing about the same volume as Venezuela. Exxon dropped out of that auction over uncertainty on total required spending, leaving Petrobras to absorb billions of dollars of investments, the people said.
The Exxon spokesperson declined to comment on the 2019 auction.
This time around, Brazil has reduced its licensing fees for Sepia and Atapu by 70%, to around $2 billion. A winner will be chosen based on the amount of future production the consortium is willing to share with the government.
The auction grants Petrobras first right of operatorship with a 30% stake in both fields even if its consortia is outbid. Petrobras would have 30 minutes to decide whether it wants to join the winning group and operate the assets.
Source: Reuters
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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