DRILLING MARKET REVIEW
As a slew of newbuild drilling rigs hit the market in 2015, cou- pled with oil companies slashing budgets due to surging costs, it is speculated that the industry will witness an acceleration in the rate of marginalization of legacy assets. “We saw spending from operators dry up in 2014,” said
Terry Bonno, senior vice president, marketing, Transocean, in a re-
cent interview with Offshore magazine. “And then the budget results
just came out, so I am not sure if we fully understand, yet, the impact
on the global universe, but initial signs are that they are reducing
their budgets for 2015.”
“If you are looking at the overall rig fleet right now, you are seeing
a bit of idling of rigs in all of the asset classes,” Bonno added. “In our
last fleet status report that was filed, we stated that we intend to scrap
some of our lower specification units. Our theme for 2015, once we
saw this difficult market coming, is to fight for utilization.”
As most drilling companies that have rigs without a contract, today,
are idling or cold-stacking these rigs, it is estimated that around 140
rigs are heading toward retirement over the next few years as the
industry makes way for the newbuilds scheduled for delivery by the
end of the decade. Around 360 rigs that are in the current market fleet
are more than 30 years old and must be retired at some point.
Moreover, analysts estimate that around one-third of the new vessels
that are in the pipeline for the next three to four years still have no drilling contracts. Rune Magnus Lundetrae, CFO of Seadrill, was quoted by
Reuters in September 2014 to say that the market could need another 24
months to bottom out, though for older assets, rates were already near
the bottom and he expected older vessels to be idled.
Cinnamon Odell, senior analyst–rigs, IHS Petrodata, told Offshore that
“we expect to see fewer orders for new rigs, as well as some cancellations
and/or deferment of rigs that have already been ordered from yards.”
Offshore drilling
market faces an
uncertain year
Total number of rigs
being built still growing,
but lower than last year Robin Dupre Senior Technology Editor
Transocean 86 52 7 13 6 19 14 0 26 8
Ensco 72 53 7 17 4 12 9 12 16 2
Seadrill 62 37 12 6 15 0 11 6 22 2
COSL 46 39 3 0 3 3 0 4 36 0
DiamondOffshore 41 24 2 9 16 5 2 0 7 2
ParagonOffshore 40 26 0 3 14 8 5 9 1 0
ShelfDrilling 39 30 2 0 0 0 5 16 17 1
HerculesOffshore 35 15 1 24 0 1 3 3 4 0
Noble 35 24 1 11 2 3 1 8 7 3
Rowan 34 25 1 9 2 6 1 10 5 1
TopTenTotal 490 325 36 92 62 57 51 68 141 19
EntireFleet 1188 680 180 121 219 101 96 167 414 70
TopTen%ofTotal 41.2% 47.8% 20.0% 76.0% 28.3% 56.4% 53.1% 40.7% 34.1% 27.1%
Notes:
• Rig Types: Arctic, drill barges (but not inland barges), drillships, jackups, semisubmersibles, submersibles and tender-assists.
• Rigs en route between regions are shown in the destination region.
• Latin America includes all South America, Central America, Caribbean and Mexico.
• Seadrill numbers do not include rigs owned and managed by North Atlantic Drilling.
Data courtesy of IHS. All data as of December 31, 2014.
Discoverer Clear Leader
(Photo courtesy Transocean)
