Offshore rig contract count
Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec.
2015 2016 2017
Source: IHIS Petrodata, Evercore ISI
Offshore drilling market
reaching bottom, says report
While industry fundamentals remain dif-
ficult, the offshore drilling market is in the
midst of a bottoming process, says a new
report from Evercore ISI.
In its “Offshore Rig Market Snapshot” issued
in mid-July 2017, the firm noted that a total of
19 new contracts were announced in July, up
from 10 at this point in mid-June. A total of 25
contracts were confirmed last month, down
from 33 in May but up from 21 a year ago.
The report also said that of the 25 contracts
firmed last month, nine were for term with
jackups dominating in a two-to-one ratio. The
term jackup contracts were for Southeast Asia
and the Middle East, while the term floater
contracts were signed by ONGC and Eni for
deepwater projects under development.
Thus far in July, floaters lead with three
term contracts versus two for jackups, while al-
most two-thirds of the 19 contracts announced
thus far were for floaters – the first month
floaters have led since November 2015.
With the industry having approved three
deepwater developments over the past month
(seven year-to-date), the firm says that it expects at least 14 contracts to be announced
in the coming weeks to continue the trend of
finishing higher on a year-over-year basis for
the seventh straight month.
The report also noted that fleet attrition
has slowed in recent months, as contractors
complete rig sales and finalize contracts to
reactivate idle rigs. Of the five term contracts
confirmed in July, all five were idle or moving
to location, while the Ensco DS- 10 is under
construction. Similarly, of the nine term contracts in June, six were idle versus two drilling,
while one was in the shipyard.
Despite increased contracting activity in
recent months, Evercore says it expects rig
retirements to reaccelerate in the coming
months as the fleet of cold stacked floaters and
jackups continue to age. Excluding operator-
owned rigs, the firm says it counted 74 cold
stacked floaters and 69 cold stacked jackups
currently, with the average floater fleet cold
stacked for 1. 3 years versus 2. 7 years for jack-
ups. There are 13 floaters and 34 jackups cold
stacked for more than 2 years that are strong
candidates for retirement, the report said.
GE, Maersk Drilling extend
digitization to nine rigs
Following a positive pilot project last year,
GE and Maersk Drilling say they have ex-
panded the scope of their digital collaboration,
designed to enhance drilling productivity.
The pilot project covered one vessel and
one asset, but the new target is nine vessels
and 110 critical equipment items, such as the
top drive, draw works, thrusters and main engines, over the course of a multi-year program
starting later this year.
GE says it will implement its SeaStream
Insight Marine asset performance manage-
ment solution to improve the consistency and
predictability of drilling performance on nine
Maersk Drilling rigs.
This provides real-time efficiency reports
and performance indicators based on data
gathered during daily offshore operations,
and in Maersk Drilling’s case is targeting a
20% maintenance cost reduction and improve-
ments in drilling efficiency.
Jesper Hansen, CIO of Maersk Drilling, said:
“Through our partnership with GE, we are not
only creating value for our two companies,
but the industry as a whole. We believe that
the systematic adoption of reliability-centered
maintenance analysis and digitization will be
a step change in our industry, and Maersk
Drilling plans to lead the way. To do that,”
Hansen continued, “we must acknowledge
the need to break down the industry silos and
work collaboratively across the value chain, as
the sharing of data will enable further digital
breakthroughs, which can enhance efficiency
and remove waste across the supply chain. By
offering new efficiency services to our custom-
ers, Maersk Drilling has taken the next step
in digitalizing the offshore drilling industry.”
By offering performance analytics for each
rig, Maersk Drilling believes it can reduce
deviations and increase productivity in opera-
tions such as drilling, tripping in, tripping out,
and running/pulling the riser.
Another achievement is predictive mainte-
nance. Maersk Drilling and GE say they have
developed digital twins – vir tual representations
of critical equipment on the rig tuned through
sensor and other equipment data – for the major
drilling and marine systems equipment.
Through using the digital twins in combi-
nation with GE’s zonal analytics, the digital
solution is said to decrease unnecessar y main-
tenance and associated costs. In addition, the
solution can detect equipment anomalies that
could cause equipment to break own, providing foresight weeks in advance of pending
GE and Maersk
Drilling say they
the scope of their
digital collaboration designed to
enhance drilling productivity.