DEPARTMENTS • DRILLING AHEAD
SEC proposes sweeping rules on
climate-related risk disclosures
BY LINDA HSIEH, EDITOR & PUBLISHER
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6 We knew it was coming, but now it’s really
on our doorstep : The US Securities and
Exchange Commission (SEC) has finally
announced its proposal to require com-
panies to include climate-related disclo-
sures as part of their audited financial
statements. The required information also
would include disclosure of a company’s
greenhouse gas (GHG) emissions .

In a statement, SEC Chair Gary Gensler
said he believes the proposal would pro-
vide investors with “consistent, compa-
rable and decision-useful information for
making their investment decisions, and it
would provide consistent and clear report-
ing obligations for issuers.” The goal, he
said, is to ensure that climate-related risks
are disclosed more efficiently and effec-
tively to meet investor demand .

The proposed changes would require a
registrant to disclose information about:
• The registrant’s governance of climate-
related risks and relevant risk manage-
ment processes;
• How any climate-related risks identified
by the registrant have had or are likely
to have a material impact on its business
and consolidated financial statements ;
• How any identified climate-related risks
have affected or are likely to affect the
registrant’s strategy, business model
and outlook; and
• The impact of climate-related events
and transition activities on the line
items of a registrant’s consolidated
financial statements .

For registrants that have publicly set
climate-related targets or goals, the pro-
posed amendments also would require
certain disclosures .

Further, the proposed rules would
require a registrant to disclose informa-
tion about its direct GHG emissions (Scope
1) and indirect emissions from purchased
electricity or other forms of energy (Scope
2). In addition, a registrant would be
required to disclose GHG emissions from
upstream and downstream activities in its
value chain (Scope 3) .

The SEC asserts that the proposed dis-
closures are similar to those that many
companies already provide based on dis-
closure frameworks like the Task Force on
Climate-Related Financial Disclosures and
the Greenhouse Gas Protocol .

What now?
The SEC’s 500+ page proposal is already
widely deemed to be not only far-reaching
but also prescriptive . Obviously, it will
require time for companies and industry
groups like API and IADC to fully review
and assess the changes being proposed
before they can understand how compa-
nies and industries will be impacted. On
the other hand, it’s not hard to see the
potential for unintended, negative con-
sequences when a federal agency tries to
implement such large-scale changes.

“We are concerned that the Commission’s
sweeping proposal could require non-
material disclosures and create confusion
for investors and capital markets,” API
said in a statement issued on 21 March.

“As the Commission pursues a final rule,
we encourage them to collaborate with
our industry and build on private-sec-
tor efforts that are already under way to
improve consistency and comparability of
climate-related reporting.”
The proposal is open for public com-
ment through 21 May (or longer as indus-
try groups like IADC request extensions),
and it’s expected that there will be a flood
of comments and perhaps even legal chal-
lenges . While the proposal will likely
undergo a multitude of changes before a
final rule is in place, and even though it
may be years before there’s an effective
date for requiring the disclosures, the time
to pay attention is now. DC
M AY/J U N E 202 2 • D R I L L I N G C O N T R AC T O R
Scan me to view a Fact
Sheet for the SEC’s
proposed rule.

bit.ly/3vr9k4H



DRILLING & COMPLETION NEWS • DEPARTMENTS
Zama unitization process
is finalized in Mexico
Talos Energy has received the final
Unitization Resolution from Mexico’s
Ministry of Energy regarding the Zama
field . Among other things, the resolu-
tion affirms the appointment of Pemex
as operator of the unit. Unitization was
required after determination that the field
is located within both the Talos-operated
Block 7 and an adjacent Pemex-operated
block. It provides for joint development of
the entire reservoir .

Talos will maintain a 17.35% partici-
pating interest in Zama , and the com-
pany anticipates submitting a Unit
Development Plan for approval by the
working interest partners within six to 12
months, a critical step before the parties
can make a final investment decision in
2023. New production starts up
from PowerNap, Colibri
Shell has announced the start of pro-
duction at PowerNap, a subsea develop-
ment in the US Gulf of Mexico with an
estimated peak production of 20,000 bbl/
day of oil equivalent (BOED) . PowerNap is
a tie-back to the Shell-operated Olympus
production hub in the prolific Mars
Corridor. “Shell has been producing in the Mars
Corridor for more than 25 years, and we
continue to find ways to unlock even
more value there,” said Zoe Yujnovich,
Shell Upstream Director.

Separately, Shell – through subsidiary
BG International – announced the start
of production on Block 22 and NCMA-4 in
the North Coast Marine Area (NCMA) in
Trinidad and Tobago.

The start-up of Colibri follows the
amendment to the Block 6 production-
sharing contract for the Manatee field .

This will allow for the delivery of gas both
domestically and internationally through
Atlantic LNG.

Project Colibri is a backfill project that
is expected to add approximately 30,000
BOED of sustained near-term gas produc-
tion, with peak production expected to be
approximately 43,000 BOED through four
subsea gas wells tied back to the existing
Poinsettia Platform .

While working for Shell, the Maersk Voyager drillship will deploy the RigFlow
solution to help digitalize well construction workfl ows.

Maersk Drilling announces multiple new contracts
for 7th-gen drillship, 2 harsh-environment jackups
Maersk Drilling has been awarded
contracts with Shell for the provision of
the seventh-generation drillship Maersk
Voyager for drilling services offshore
multiple countries. The contracts were
expected to commence by April , with a
total firm duration of one year. The total
contract value is approximately $107.5
million, including a mobilization fee but
excluding integrated services expected
to be provided and potential performance
bonuses. The contracts include an addi-
tional one-year option.

To support a strong operational per-
formance in the campaigns, Maersk
Drilling and Shell have agreed to imple-
ment the RigFlow solution delivered by
Maersk Drilling subsidiary Horizon56.

RigFlow standardizes and digitalizes the
core workflows involved in well con-
struction, including real-time exchange
of information between onshore plan-
ning units, the offshore drilling teams,
and the service companies supporting
the operations.

Separately, Maersk Drilling has been
awarded a contract for the Maersk
Resolve. The harsh-environment jackup
rig will work for an operator in the UK
sector of the North Sea starting in April ,
with an estimated duration of 150 days.

The contract value is approximately
$16.9 million, including mobilization and
demobilization fees. The contract con-
tains options to add additional work
scopes with a total estimated duration of
85 days to the campaign.

The Maersk Resolve had been warm-
stacked in Esbjerg, Denmark, since com-
pleting its previous contract in the UK
North Sea in January 2022.

Additionally, Maersk Drilling has been
awarded contracts for the harsh-envi-
ronment jackup rig Maersk Resolute. It
will plug and abandon a total of 31 wells
in the Dutch sector of the North Sea
in support of a rig-sharing agreement
between TotalEnergies and Petrogas .

The contracts are expected to com-
mence in Q2/Q3 2022, in direct continu-
ation of the rig’s current contract, and
will include the plugging and abandon-
ment of 11 wells with TotalEnergies and
20 wells with Petrogas. The estimated
duration is 575 days, and the total firm
contract value is approximately $43 mil-
lion, excluding potential performance
bonuses. The contracts include options
to add additional work scopes with a
total estimated duration of 228 days.

D R I L L I N G C O N T R AC T O R • M AY/J U N E 202 2
7