Total is set to kick off drilling next month of a keenly anticipated re-entry of the earlier abandoned Brulpadda-1 well off South Africa using semi-submersible Deepsea Stavanger.

Rig owner Odfjell Drilling revealed in its third-quarter results that the semisub is currently en route to South Africa for the one-well contract and it is expected that operations, with an estimated duration of 60 to 80 days, will begin in December.

Total suspended drilling of the Brulpadda-1 wildcat in Block 11B/12B in late 2014 with the semisub Eirik Raude. Sources suggested that the Ocean Rig unit and its riser systems were unable to handle these challenging conditions, although this was denied by Total.

Total is known to have been looking into drilling a re-entry at the abandoned hole on the potentially huge Paddavissie structure.

The charter of the Deepsea Stavanger, a 2010-built sixth-generation harsh-environment semisub, is estimated to be worth $55 million including mobilisation costs and an optional well, with Odfjell citing a dayrate of $305,000 for the job.

The Oslo-listed driller expects dayrates for such modern harsh-environment units to strengthen on increasing demand from operators and “substantial scrapping” of older floaters to help rebalance the still oversupplied global floater market.

“Based on the preference for new and more efficient units combined with a high reactivation cost, we believe that scrapping of older midwater and harsh-environment drilling units will continue over the next few years,” Odfjell stated.

“In combination with a more healthy market environment, we believe this will bring the
harsh-environment market back into balance with subsequently improved dayrates.”

The company said it is seeing higher tendering activity and increased utilisation of the harsh-environment fleet, with its own active four-rig fleet recording average financial utilisation of 98% during the last quarter.

The quartet are employed on medium to long-term contracts at dayrates ranging from $175,000 for older 1983-built semisub Deepsea Bergen, which is currently working for Equinor off Norway, to $431,000 for the 2014-built Deepsea Aberdeen that is employed with BP West of Shetland off the UK.

A further newbuild, Deepsea Nordkapp, is due to start on a firm two-year contract with Aker BP off Norway worth $245 million - giving an approximate dayrate of $335,000 - on scheduled delivery in the second quarter of next year.

The latter unit, acquired at a total cost of $505 million, is now fully financed for delivery after Odfjell recently finalised a $325 million loan facility, having already raised $175 million in an equity issue.

Odfjell has bolstered its firm contract backlog to $1.5 billion, up from $1.3 billion a year earlier, after winning more work for the Deepsea Bergen with MOL off Norway and Ithaca off the UK.

However, the Oslo-listed driller saw its net profit shrink to $8.4 million from $17.8 million a year earlier as revenue was hit by a lower dayrate for the Deepsea Stavanger during the period.

However, the rig revenue drop was offset by an increase in takings for its drilling & technology division on higher platform drilling activity, giving a slight boost in total operating revenue to $181.2 million from $178.5 million in the same period of 2017.

Meanwhile, Odfjell said it intends to relocate its headquarters to Aberdeen, Scotland in a redomiciling exercise to register for tax in the UK away from its current Bermuda-registered base.

The decision, subject to shareholder approval, has been made following a strategic review due to the fact it already has a strong presence in the UK and wants closer proximity to its core North Sea operations.

Odfjell Drilling saw its profits shrink in the third quarter but is seeing increased demand for its harsh-environment rigs as the contractor bolstered its backlog from a year earlier.

The Oslo-listed driller said there has been “substantial scrapping” of older floaters, despite a continued oversupply in the global rig market, that combined with higher demand is boosting utilisation of the harsh-environment fleet.

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Total poised for Brulpadda-1 re-entry