Friday, 11 September 2026

Two cylindrical semisubmersible rigs once slated to become floating LNG liquefaction plants are heading to the breakers instead. New Fortress Energy has sold both units for demolition, ending a conversion effort it began four years ago after buying them from Seadrill in 2022, Offshore Magazine reported.

The hulls were cheap when NFE took them on. Offshore Magazine put the April 2022 price at USD 18 million for Sevan Driller and USD 6 million for Sevan Brasil, with the cold-stacked pair changing hands while Seadrill was selling down assets after its own Chapter 11 restructuring. Wes Edens leads NFE.

Design work pointed each converted hull toward roughly 1.4 million tonnes per year of NFE-designed liquefaction capacity. The first conversion carried a target of the first half of 2024, according to Offshore Magazine.

Mexico was the destination for one of them. Sevan Driller had been assigned to the Lakach deepwater gas project with Pemex, a development NFE concluded in 2025 was no longer probable, per the company's latest quarterly filing cited by Offshore Magazine. Lakach sat among the assets written down in a USD 123.1 million impairment.

Offshore Magazine ties the demolition sales to a pullback from LNG expansion plans while NFE completes a balance-sheet overhaul. The UK High Court sanctioned the company's Part 26A restructuring plans on June 18-19, 2026, and the US Bankruptcy Court for the Southern District of New York subsequently recognized them under Chapter 15.

What the overhaul did to leverage: corporate debt on the surviving CoreCo/New NFE business fell from about USD 5.7 billion to roughly USD 527.5 million, a cut of about 91%, Offshore Magazine reported.

A record 13.8 million b/d is what the US Energy Information Administration (EIA) now expects domestic crude output to average in 2026, topping the 13.7 million b/d record of 2025, Oil & Gas Journal reported from the agency's latest Short-Term Energy Outlook.

Output had already reached that prior record pace by mid-year. First-half 2026 crude averaged 13.7 million b/d, 0.3 million b/d above the year-earlier half and 2% higher, according to the EIA data carried by Oil & Gas Journal.

EIA projects Permian crude output at 6.8 million b/d in 2026, 3% above the 2025 average.

The steeper percentage move came offshore. Crude from the federal Gulf of Mexico rose 0.2 million b/d in the first half of 2026, a 10% gain on the same months of the prior year, per Oil & Gas Journal. Among the contributors is the Shenandoah floating production unit, running at an average of 70,000 b/d since it began producing in July 2025.

West Texas Intermediate has run well above the breakevens operators report. The benchmark averaged $84/bbl through August, against $65/bbl in 2025. The Dallas Fed Energy Survey in March put average breakeven prices at $69/bbl for the Midland basin and $63/bbl for the Delaware basin, as reported by oil executives.

Up to two long-term LNG sales and purchase agreements are now on the table between ADNOC and RWE Supply & Trading, after the two signed a letter of intent, World Oil reported. Deliveries under the planned contracts would start in the early 2030s, with cargoes directed to Germany, other European buyers and customers in Asia.

ADNOC's existing long-term LNG supply contracts into the German market total 1.6 MMtpa, according to World Oil.

In a second agreement, ADNOC, XRG and Germany's Securing Energy for Europe (SEFE) signed a memorandum of understanding to work together on natural gas and LNG projects, World Oil reported.

Both deals belong to a package announced by ADNOC, XRG and Masdar that could enable more than EUR 5 billion of investment in Germany's energy and industrial sectors, per World Oil. The three companies put their investment in those sectors to date at more than EUR 20 billion.

The IEA cut its 2026 world oil supply forecast to an average of 100.7 MMbpd, 1.3 MMbpd below its previous estimate, according to World Oil.

Supply is now forecast to fall 5.7 MMbpd over the year, with prolonged Middle East disruptions pushing a recovery in Gulf production into next year, World Oil reported.

August output showed the strain. Global production dropped 1.6 MMbpd month-over-month to 100.1 MMbpd, and more than 10 MMbpd of Gulf production stayed shut in amid heightened security risks, according to World Oil. Gulf oil exports averaged about 13 MMbpd during the month, nearly half their pre-war level.

Demand is contracting faster than the agency had assumed. The IEA forecasts global oil consumption will fall 2.5 MMbpd in 2026, a decline 940,000 bpd steeper than the drop projected in its August report, World Oil reported.

Inventories continue to absorb the gap. Observed oil stocks fell a further 95 million bbl in August, taking cumulative draws since February to 507 million bbl.

Prices reflected the tightening. North Sea Dated averaged USD 91/bbl in August before reaching USD 113.48/bbl on Sept. 9, according to World Oil.

"Buffers [are] shrinking and the global refining system [is] stretched to the limit," the agency said.

UOG has framed its work on rig and equipment requirements for a first well offshore Jamaica as a study rather than a decision to drill, according to Offshore Magazine. Whether anything follows depends on two conditions: the Government of Jamaica must grant the required approvals, and commercial agreements must be signed.

Across the Gulf of Mexico, Guyana, Suriname and Trinidad, the company will look at logistics support infrastructure, the readiness of local ports, and the wider regional supply chain, Offshore Magazine reported.

FERC has approved an expansion of the Gator Express pipeline that will move an additional 627,000 dekatherms/day to Venture Global's Plaquemines LNG plant in Louisiana, according to Oil & Gas Journal.

The certificate lets Gator Express, also owned by Venture Global, uprate its 26.8-mile, 42-inch line from 3.9 million Dth/d to 4.6 million Dth/d, Oil & Gas Journal reported.

No new construction or modifications to the pipeline and its infrastructure are involved, per the same report, with those facilities already in service.

Protests arguing that the higher operating pressure warranted a safety study were dismissed, and the commission found that Venture Global had demonstrated need for the increased throughput, Oil & Gas Journal reported.

In a separate authorization, the commission cleared construction and operation of the USD 1.1 billion Kosciusko Junction Pipeline Project in Mississippi. That project will add 1.175 million Dth/d of incremental firm transportation capacity serving power-generation, industrial, and downstream delivery markets across the Southeast, according to Oil & Gas Journal.

Chevron's Anchor floating production unit started up in August 2024 with electric motors and electronic controls driving its main topsides equipment, according to Offshore Magazine.

The unit sits in Green Canyon Block 763, about 140 miles off Louisiana in roughly 5,000 feet of water, Offshore Magazine reported. Chevron operates the project with a 62.86% working interest, and TotalEnergies holds the remaining 37.14%.

Design capacity is 75,000 barrels of oil per day and 28 million cubic feet of gas per day, per Offshore Magazine. Across an expected 30-year life, the field is projected to recover about 440 million barrels of oil equivalent on a gross basis.

The industry-first claim attached to the project is not the electrification but the 20,000-psi subsea system that made the reservoir developable, according to Offshore Magazine.

Shell's Sparta, scheduled for 2028, takes the approach further with all-electric compression inside a standardized hull, targeting lower emissions and better efficiency on large power loads, Offshore Magazine reported.

The International Energy Agency (IEA) forecast global oil demand will fall by 2.5 million b/d in 2026, according to Oil & Gas Journal. That is 940,000 b/d steeper than the agency projected in its August report.

Demand will land at 102.45 million b/d in 2026 before recovering to 105.01 million b/d in 2027, Oil & Gas Journal reported on the IEA figures. The agency said consumption will not regain its prewar level of about 106 million b/d until late 2027.

The supply side of the ledger is the constraint. Gulf oil supply dropped 2 million b/d in August to 21.9 million b/d, leaving it 10.1 million b/d below prewar levels, according to Oil & Gas Journal.

S&P Global, for the first time since the US-Iran war began, no longer expects Middle Eastern crude production to recover to prewar levels by yearend 2027, Oil & Gas Journal reported.

The firm now sees crude prices broadly in an $80-100/bbl range through 2027. Dated Brent is expected to average around $90/bbl or higher for the balance of 2026 and $86/bbl in 2027, according to S&P Global.

Spot pricing has already run above that band. North Sea Dated crude averaged $91.00/bbl in August, up $7.61/bbl from July, and reached $113.48/bbl on Sept. 9, Oil & Gas Journal reported.

Crude has added $24.50/bbl across a 10-day rally tied to increasing military action on both sides of the Iran war, Oil & Gas Journal reported.

The International Energy Agency (IEA) says regular oil flows through the Persian Gulf and Red Sea regions will not recover until next year.

The agency has cut its demand view for the year by 2.5 million b/d, to 102.4 million b/d.

Russian oil refinery capacity is running an estimated 30% below normal because of attacks by Ukraine, according to the IEA.

On the supply side, Saudi production fell 1.9 million b/d in August to about 6.0 million b/d, per Oil & Gas Journal. OPEC+ agreed at its meeting last Sunday to keep output levels unchanged for October.

US Strategic Petroleum Reserves drew down 1.2 million bbl to 285 million bbl, the lowest since 1982. US oil production rose to 13.9 million b/d.

ONGC has awarded L&T Energy Hydrocarbon Offshore (LTEH Offshore) an engineering, procurement, construction, installation and commissioning (EPCIC) contract covering the Additional Development of Ratna-I (ADR I) and NLM-14 projects off India's west coast, according to Offshore Magazine.

The contractor will build three new wellhead platforms and one riser platform under the award, Offshore Magazine reported.

Subsea pipelines and cables also fall within the scope, alongside brownfield modifications to offshore installations already in place, according to the same report.

Twenty-one exploration and production companies filed applications for acreage in Norway's APA 2026 licensing round, according to Offshore Magazine.

The round covers an expanded predefined area spanning the North Sea, the Norwegian Sea and the Barents Sea, Offshore Magazine reported. Seventy blocks and part-blocks were added to that predefined area.

Offshore Magazine said the added acreage could help generate the discoveries needed to sustain Norwegian oil and gas production and exports.

License awards from the round are expected in early 2027, according to Offshore Magazine.

Vallourec has signed an agreement with Aramco covering the commercial, industrial and technological side of their relationship in Saudi Arabia, according to Offshore Magazine. The deal was concluded at the French-Saudi Investment Roundtable Meeting in Paris.

Offshore Magazine reported that the two companies have worked together since 1962, when Vallourec began supplying VAM premium connections for oil country tubular goods (OCTG). In 2022 the relationship moved to a long-term supply arrangement covering locally manufactured premium OCTG pipe.

Separately, Vallourec is launching an insulation manufacturing project in Brazil, according to Offshore Magazine. That project will serve ExxonMobil's Longtail and Hammerhead developments offshore Guyana.