Report: Floater market in Mexico remains subdued

Aug. 16, 2024

Floating drilling rig market offshore Mexico may pick up next year, says Evercore ISI.

By Bruce Beaubouef, Managing Editor

The floating drilling rig market in Mexico remains subdued but may pick up starting next year, according to Evercore ISI’s latest Offshore Rig Market Snapshot.

Pemex’s focus on shallow-water operations has primarily led to a decline in the utilization of contracted semisubmersibles in Mexico since 2014. Contracted semisubs in Mexico averaged ~6.0 units in 2014 (peak since 2009), gradually declining to an average of ~1.4 units in July 2024, says Evercore.

The Essar Wildcat rig is expected to commence its contract with Pemex in August 2024.

There are currently four semisubs in Mexico, excluding the Valaris DPS-5, which recently departed to the US GoM after finalizing its contract with Eni. The Frida I rig had started a three-year contract with Pemex in January 2023, but the contract was terminated early as the rig was sold to an unknown drilling contractor shortly after the contract commenced. The Essar Wildcat rig is expected to commence its contract with Pemex in August 2024, while the Independencia 3 and Bicentenario have been stacked since September 2018 and May 2019, respectively.

In the Central American region, there are three available semisubs, says Evercore: the Noble Developer, the Development Driller III (Transocean), and the Independencia 2.

But there is the potential for increased activity in the near future, the report indicates. Year-to-date, Repsol has issued an RFI for a drilling campaign in block 29 offshore Mexico. This job calls for one well plus one option well, each with 35 days, with drilling operations expected to commence in 3Q 2025. Pemex has issued a tender for a semisub for a two-year charter offshore Mexico, and Eni has issued a tender for a floater campaign, which is anticipated to commence in 2025. This job calls for one firm well plus three option wells, each with 60 days, with drilling operations expected to begin between April and September 2025.

In addition to these floater requirements, the Zama and Lakach fields have significant development plans, which are likely to drive longer term demand in Mexico.

About the Author

Bruce Beaubouef | Managing Editor

Bruce Beaubouef is Managing Editor for Offshore magazine. In that capacity, he plans and oversees content for the magazine; writes features on technologies and trends for the magazine; writes news updates for the website; creates and moderates topical webinars; and creates videos that focus on offshore oil and gas and renewable energies. Beaubouef has been in the oil and gas trade media for 25 years, starting out as Editor of Hart’s Pipeline Digest in 1998. From there, he went on to serve as Associate Editor for Pipe Line and Gas Industry for Gulf Publishing for four years before rejoining Hart Publications as Editor of PipeLine and Gas Technology in 2003. He joined Offshore magazine as Managing Editor in 2010, at that time owned by PennWell Corp. Beaubouef earned his Ph.D. at the University of Houston in 1997, and his dissertation was published in book form by Texas A&M University Press in September 2007 as The Strategic Petroleum Reserve: U.S. Energy Security and Oil Politics, 1975-2005.