Report: jackup market in Northwest Europe continues to be challenged

Oct. 16, 2023

One significant challenge is the short-term nature of work in the North Sea and offshore Europe.

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Bruce Beaubouef * Managing Editor

Northwest Europe’s jackup market continues to face challenges, including a lack of work and lower dayrates compared to other regions, according to Evercore ISI’s latest Offshore Rig Market Snapshot.

According to the report, this is due to excess profit taxes and uncertain government rules. This is also partly due to the region’s advanced progress in the energy transition, says Evercore, which has led to stricter regulations and environmental activism.

Globally, Northwest Europe ranks highly in terms of the number of jackup requirements, with 17, while only Southeast Asia, India, and West Africa having more requirements. The Middle East, which is a major driver of the jackup market, now has fewer requirements. The report notes that Saudi Aramco has executed 68 separate jackup charters since early 2022 but now has no outstanding demand.

One significant challenge in Northwest Europe is the short-term nature of work, with an average program duration of around 10 months to one year. India has the largest backlog of unfilled work and the longest average duration per requirement globally. The report highlights Southeast Asia as a market that may vie for available North Sea jackup capacity.

The uncertainty in the UK sector regarding the Energy Profits Levy (EPL), the influence of the green lobby in the Dutch sector, and depressed Norwegian demand all contribute to the possibility of more jackup rigs leaving the Northwest Europe market, Evercore says.

The jackup forecast for Northwest Europe suggests an average demand of 26.9 units in 2024 against an average marketed supply of 29.6 units, resulting in an average marketed surplus of 2.7 units, says Evercore. In 2025, the average demand is expected to be 26.4 units from an average marketed supply of 30.0, with an average marketed surplus of 3.6 units.

10.16.2023

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.