US major ConocoPhillips was just about to kick off a keenly watched exploration and appraisal drilling campaign offshore Malaysia where success was intended to help underpin a proposed floater-based field development, when disaster struck.

ConocoPhillips had contracted Velesto Drilling’s jack-up Naga (Dragon) 7 for the back-to-back three-well programme offshore Sarawak but the rig is now submerged - having sunk on location of the first well following a punch-through incident.

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The operator was to have initially drilled the Salam-3 appraisal well on Block WL4-00, which was expected to take 25 days to complete, and this would have been followed by the Gagau-1 wildcat on the same production sharing contract. The Gagau-1 exploration well was also expected to take some 25 days.

The operator for a few years has been working on plans and engineering studies to exploit its shallow-water discoveries on Block WL4-00, which is home to the Salam field and satellite Patawali and Benum finds.

Base case development concept

The preferred option is understood to be a leased floating production, storage and offloading vessel that would produce oil and gas, although other concepts are being evaluated.

ConocoPhillips four years ago was awarded the Block WL4-00 PSC, which came with the Salam-1 oil discovery made by the previous operator Petronas Carigali.

Today the block is operated by the US player with Malaysia’s national upstream company Petronas Carigali having an equal 50% share.

On completion of the Gagau-1 well, the Naga 7 was to have moved to Block SK 304 – around 200 kilometres to the southwest - to drill the Mersing-1 probe that was envisaged to take about 40 days.

ConocoPhillips has acquired 3D seismic in Block SK 304.

The drilling campaign was being supported by three Malaysia-flagged vessels – the large anchor-handling tug supply vessels Setia Jihad and Perdana Marathon, and the platform supply vessel Armada Tuah 305.

ConocoPhillips had earlier performed soil boring studies and site surveys at the three locations ahead of its planned 2021 drilling campaign.

Upstream reported on 28 March that the operator had issued a letter of award for Velesto Drilling’s Naga 7 for up to three wells – a contract worth an estimated $8 million, according to the rig owner.