Odfjell and Total agree to delay South African drilling work

JP Casey 20 May 2020 (Last Updated May 20th, 2020 11:03)

Odfjell and Total agree to delay South African drilling work
Total will reduce its capital spending due to the coronavirus downturn. Credit: Total.

Norwegian drilling firm Odfjell Drilling has announced that it has reached an agreement with French giant Total to suspend proposed drilling work off the South African coast, due to ongoing uncertainties related to the Covid-19 pandemic.

The two companies had originally agreed to begin drilling work in the second quarter of this year, using one of Odfjell’s Deepsea Stavanger drills, a facility designed for use in exploratory or development work, which can operate up to depths of three kilometres. As recently as April, the companies expected the drill to be shipped to South Africa to begin work, but this timeframe has since proven optimistic, with both companies accepting that the rig will remain idle for an unspecified time.

“Once the idle period is complete, the rig will mobilise to South Africa to commence its charter as planned,” said Odfjell in a statement announcing the delay. “The idle agreement is a reflection of both parties’ commitment to proceed with the South Africa drilling program and shall provide the framework to navigate the current uncertainty.

“Odfjell Drilling will be compensated by Total during this idle time,” continued the company.

Total first discovered the gas condensate deposit during exploration work completed last February; the discovery, dubbed the Brulpadda well, revealed gas deposits up to 3,633m below the surface of the water, and Total immediately followed this work by purchasing a number of additional exploration licenses.

In sum, Total has permits to explore 19,000km2 kilometres up to a depth of 1,800m in the area, and has signed operating agreements with a number of other companies, including Qatar Petroleum and South African consortium Main Street, to further develop the project.

“We are very pleased to announce the Brulpadda discovery, which was drilled in a challenging deepwater environment”, said Kevin McLachlan, senior vice president of exploration at Total upon the discovery last year. “With this discovery, Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block.”