$189 billion to go toward drilling in next five years
Judy Maksoud
International Editor
Deepwater drilling is pushing the new building and upgrades evident in this year's mobile offshore drilling unit survey. Most of the money being spent by drilling contractors over the next few years is targeting deepwater drilling.
That money is being spent wisely if analysts at Douglas Westwood are correct in estimating that $189 billion will be spent over the next five years on offshore drilling. Accor-ding to the recently released "World Offshore Drilling Report," $75 billion is expected to go for exploratory drilling, with the remaining $114 billion being spent on development. The largest change predicted is for continuing growth in deepwater drilling (over 500-m water depth).
"On average around 3,000 to 3,200 offshore wells are drilled each year, of which 12% are now in deepwater. These are expected to increase to around 17% of all wells drilled in 2008, with $56 billion (30% of the total) forecast to be spent globally on drilling and completing deepwater wells over the next five years. This is an increase from $37 billion (22% of the total) in the previous five-year period," says study author, Michael R. Smith of EnergyFiles Ltd.
Over the next five years, Smith says, an estimated 15,000 offshore wells will be drilled worldwide. He predicts spending levels will grow somewhat over the next two years and then decline slightly, stabilizing at about $37 billion per year. This bodes well for contractors that have invested in improving their assets for deepwater capability.
New assets
Although deepwater is the primary target for upgrades and newbuilds, no drillships were launched in the past two years, and none of the contractors has announced plans to add a drillship to its fleet in the foreseeable future.
Surprisingly, there are 28 newbuilds listed in this year's mobile offshore drilling unit survey, up from 23 last year.
Less surprisingly, most of the newbuilds are jackups, but a fair number are high-end semisubmersibles. With the increase in deepwater drilling worldwide, the addition of new semis with deepwater drilling capability comes as no shock.
The Mærsk Innovator operating for Statoil on the Glitne field in the Norwegian North Sea.
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Pride International recently took delivery of two dynamically positioned semis with 5,500-ft water depth capability. GlobalSantaFe will take delivery of the Development Driller 1 later this year and plans for Development Driller II to be ready by early next year. Both rigs have 7,500-ft water depth capability. Noble Drilling is building two new semis, and Mærsk, Moss, Smedvig, and National Iranian Oil Co. are each building one.
Utilization rates for the deepwater and ultra-deepwater rig market are expected to remain high for the next few years, especially for drillships and 5th generation semisubmersible rigs water depth rated at greater than 1,500 m, according to the "World Offshore Drilling Report." The expectation is for water depth capabilities to continue to grow beyond the current drilling record of 3,053 m.
According to the Douglas Westwood report, North America will see the greatest share of total spending at $57 billion, an increase of 6% over the previous five-year period, though the total number of wells drilled will decline slightly.
The other primary growth areas for deepwater drilling are Latin America and Africa, which will see an increase in expenditure of $6.1 billion and $8 billion respectively, a growth of around 43%. The forecast for Asia is about the same as the previous period, and the outlook for Western Europe shows a decline of 12%.
2004 survey data
This year's survey lists 114 MODUs. An abbreviation appears in the first column following the name of the rig to indicate the vessel type: jackup (ju), semisubmersible (ss), drillship (ds), tender (t).
Of the 114 vessels listed, there are 67 jackups, 38 semisubmersibles, 7 drillships, and two tenders. The construction status of each rig is listed in a column that indicates that it has been recently completed, is under construction, or was planned between January 2003 and May of this year.
Twenty-eight of the units surveyed are newbuilds: 10 semisubmersibles, 17 jackups, and one tender rig. The remaining 86 units surveyed are being converted or upgraded. Of those, 50 are jackups, 28 are semisubmersibles, 7 are drillships, and one is a tender rig.
Sixty-four of the rigs listed were upgraded or launched between January 2003 and June of 2004. Twenty-one are semisubmersibles, 39 are jackups, three are drillships, and one is a tender rig.
Of the remaining 51 rigs listed as "planned" or "underway" in the survey, only 30 list delivery dates. Twenty-three units will be completed in 2004, five in 2005, and two in 2006. There was no completion date provided for the other 21 units.
Each listing includes the owner of the vessel, the vessel's name if one has been assigned, the type of vessel, whether it is a newbuild or under construction (planned, underway, or recently completed), new capabilities or upgraded features if provided, the proposed completion date, and the construction yard if that information was supplied.
The information presented in this survey appears as it was submitted by the participating companies, with the exception of some rigs undergoing modification, for which information was taken from Rigzone.com.
