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Britain’s oil and gas industry body called for new drilling licenses in the North Sea and rapid investment in the sector to mitigate the impact of high prices on consumers as the country grapples with the worst energy crisis in decades.
The incoming UK Prime Minister Liz Truss has vowed to act immediately to help people cope with surging energy bills that threaten to leave many unable to heat their homes this winter and said during her campaign she would seek to extract more oil and gas from the North Sea.
The benchmark European gas price has quadrupled in the last year due to a war in Ukraine, sanctions on Russia and the aftermath of the coronavirus pandemic.
Offshore Energies UK (OEUK), an industry body for offshore oil, gas, hydrogen and wind producers, warned that Britain could face potential energy shortages this winter while global prices could remain high for at least three years.
“The best way for the UK to ensure secure gas and oil supplies is by increased investment in its own resources,” said Ross Dornan, OEUK’s market intelligence manager.
Gas production in the United Kingdom rose 26% in the first half of 2022 compared to the same period last year, buoyed by new projects off England’s east coast.
OEUK said in a report published on Wednesday that the increase could be “short-lived” without a surge in investment. The industrial body sees a potential for 26 billion pound ($30 billion)capital investment in oil and gas sector by 2030.
Britain is not directly reliant on Russian gas imports, but its connectivity to the European countries through pipelines and its imports of liquefied natural gas (LNG) from other regions mean that it is also affected by the European and global price increases.
Without new investment, it will have to import around 80% of its gas by 2030, and around 70% of its oil, up from around 60% and 20% now respectively, the OEUK said.
Green groups have argued ramping up Britain’s oil and gas extraction is at odds with its climate target of reaching net zero emissions by 2050.
“This will do nothing to tackle the cost of living crisis as new licenses take many years to develop,” said Mike Childs, head of science, policy and research at Friends of the Earth.
In an interview with Reuters on Tuesday, the CEO of British oil and gas firm Enquest also urged the incoming government to offer investment incentives to North Sea oil and gas companies.
Increasing oil and gas drilling in the UK North Sea is one of the solutions to tackling the current energy crisis, EnQuest’s Amjad Bseisu said.
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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