Potential delay looms over first oil from Gabon project due to rig availability

Oslo Stock Exchange-listed oil and gas E&P company BW Energy has revealed that the first oil from its project offshore Gabon may be delayed due to a potential change in the Borr Drilling-owned rig’s schedule, which would impact the rig’s availability, moving its slot for this project to next year.

At the end of May 2022, BW Energy informed that it was still on track for the first oil from its Hibiscus/Ruche development off Gabon later during the year in spite of delays caused by the pandemic and the current geopolitical crisis, exacerbated by Russia’s attack on Ukraine. However, the company did confirm that an increased risk of delays was still present due to price inflation on services and materials.

In an update on Tuesday, BW Energy disclosed that it was informed by Borr Drilling about a potential delay in the delivery of the Norve jack-up rig, which the firm contracted for four wells firm plus four optional wells with an option to drill two exploration wells within the programme.

The reason why the delivery of this rig may be postponed towards the end of the year is due to the potential exercise of the final remaining well options by the company for which the rig is currently working. Additionally, a change out of the drilling rig’s blow-out-preventer (BOP) could delay the start of the rig’s contract with BW Energy.

This announcement comes only days after Vaalco Energy revealed its plans to add two more wells to the work scope of this rig in Gabon in a bid to take advantage of both higher oil prices and reduced overall spread costs in the current contracts.

Based on Borr Drilling’s fleet status report, the Norve rig has been working with Vaalco since December 2021 with an expiration date set for August 2022 and with an option to extend. After completing this work, the rig was scheduled to carry out operations for BW Energy from October until May 2023.

However, the extension of the rig’s contract with Vaalco would keep the rig occupied longer, thus, the slot with BW Energy would need to be bumped to 2023. According to BW Energy, this would imply that the first oil from the Hibiscus/Ruche development will occur towards the end of the first quarter of 2023, as compared to its previous anticipated date in late 2022.

Located approximately 20 kilometres northwest of the Tortue field, the initial phase of the Hibiscus/Ruche project involves the drilling of up to six horizontal production wells in a 12-well phased programme, which will be connected to a production facility. Four of these six wells will target the Hibiscus field while the remaining two wells will target the Ruche field.

BW Energy used the Borr Norve jack-up drilling rig last year for its 2021 Gabon drilling campaign, which included the spudding of a horizontal production well at the Tortue field. This was completed in July 2021. A few months later, in October, the company started production from the Tortue Phase 2 field development on the Dussafu Marin permit.

Based on BW Energy’s results for the second quarter of 2022, the gross production from the Tortue field, averaged approximately 10,700 barrels of oil per day in this quarter, amounting to a total gross production of approximately 975,000 barrels of oil for the period.

In addition, the company confirms that the Hibiscus Alpha conversion of a jack-up rig to an offshore production unit remains on schedule with a planned sail away from the yard in the UAE in August. The 20 km pipeline from Hibiscus Alpha to the FPSO BW Adolo will be installed by TechnipFMC.

To remind, BW Energy bought two sister jack-up rigs – Atla and Balder – in November 2020 from Borr Drilling, planning to convert one of the rigs for the Gabon project to reduce investments for the project and time to first oil.

Four months later, Houston-based Zentech was awarded the shipyard construction specification preparation contract for the conversion of the jack-up rig Hibiscus Alpha (ex-Atla) while in October 2021, the UAE-based Lamprell was chosen for the rig conversion deal.