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Figure 3. Floating rig demand by region in 2021
under two different oil price scenarios.
Other refers to the Black, Mediterranean and Red Sea, East Africa and Indian Subcontinent. Source: MSI
DRILLING & COMPLETION
Maritime Strategies International’s Drilling
Rig Forecasting Model allows users to test the
impact of different oil and gas price scenarios
on rig demand, day rates and prices.
In terms of rig numbers, the principal ar-
eas that would benefit from a higher oil price
would be Latin America – a resurgence led by
Petrobras off Brazil, supported by continued
deepwater exploration offshore Guyana and
Suriname – and the US Gulf of Mexico. Higher
oil prices would also stimulate significant deep-
water campaigns in the Black and Caspian seas
and incremental demand offshore East Africa.
West Africa and the Asia/Pacific region appear
less responsive to oil price fluctuations, but are
more prone to be held back by bureaucratic
hurdles and perceived political risk.
What are the implications for owners and
operators of floating rigs? First, setting aside
Northwest Europe, international oil companies
plus Petrobras, rather than national oil companies, will be most responsive to an uptick in
the oil price, and bullish rig operators should
position themselves accordingly.
Second, because the geographical charac-
teristics of the regions which have the highest
sensitivity to the oil price are also best suited
to drillship operations, drillship demand going
for ward will depend on oil price movements.
So it is the UDW owners that should be praying most fervently for an oil price recovery. •
James Frew is Director of Consultancy at Maritime
Strategies International (MSI), and independent
research and consultancy firm established in 1986,
which has built a strong focus on maritime economics
and econometric modelling. The company’s asset forecasts are said to be used by maritime finance providers
holding 40% of all shipping bank debt.