Report: Carbon capture opportunities may drive North Sea jackup demand

Dec. 1, 2023

CCS projects are requiring the drilling of new wells and also P&A work, says Evercore ISI.

The Valaris 292 and Valaris 123 jackups will be undertaking work related to CCS projects.

Bruce Beaubouef * Managing Editor

NEW YORK CITY – While the jackup market in Northwest Europe continues to remain challenged due to a lack of work and lower day rates, CCS projects and P&A work may help prompt new demand in the region, according to Evercore ISI’s latest Offshore Oracle report.

Two recent contracts provide examples of the CCS trend, the firm says. The first, involving TAQA and the jackup Valaris 123, entails a program for wells on the Porthos CCS project in the Dutch sector, expected to commence in late 2024. The contract for the Valaris 123 involves six wells plus up to ten optional wells, and has a minimum duration of 170 days plus a total optional duration of 300 days.

Additionally, the Hynet CCS project in the East Irish Sea awarded contracts to the jackup Valaris 72 and the jackup Valaris 292, with the Valaris 72 expected to begin a "substantial" P&A campaign this month.

These developments represent a meaningful shift in the offshore rig market, Evercore says, indicating nearly four rig-years out of 13.8 rig-years awarded to jackups in the UK, Dutch, and Danish sectors supporting CCS projects this year.

Certain projects will require the drilling of new wells to enable CO₂injection, while others might require extensive P&A work, similar to Eni’s Hynet project (a 55-well P&A contract), Evercore said.

Norway in particular is leading the way on offshore CCS projects, the firm noted. Earlier this year, five companies, including Equinor, Neptune Energy, Storegga, Sval Energi, and Wintershall Dea, submitted applications to the government to store CO₂ in the Norwegian waters of the North Sea.

12.01.2023

About the Author

Bruce Beaubouef | Managing Editor

Bruce Beaubouef is Managing Editor for Offshore magazine. In that capacity, he plans and oversees content for the magazine; writes features on technologies and trends for the magazine; writes news updates for the website; creates and moderates topical webinars; and creates videos that focus on offshore oil and gas and renewable energies. Beaubouef has been in the oil and gas trade media for 25 years, starting out as Editor of Hart’s Pipeline Digest in 1998. From there, he went on to serve as Associate Editor for Pipe Line and Gas Industry for Gulf Publishing for four years before rejoining Hart Publications as Editor of PipeLine and Gas Technology in 2003. He joined Offshore magazine as Managing Editor in 2010, at that time owned by PennWell Corp. Beaubouef earned his Ph.D. at the University of Houston in 1997, and his dissertation was published in book form by Texas A&M University Press in September 2007 as The Strategic Petroleum Reserve: U.S. Energy Security and Oil Politics, 1975-2005.