Offshore staff
NEW YORK CITY – Saudi Arabia is driving demand for offshore drilling rigs as it seeks to boost its production capacity over the next few years, according to Evercore ISI’s latest Offshore Oracle report.
Saudi Aramco contracted two newbuild jackups over the past month, adding to three newbuilds contracted in April for a total of five jackups for delivery before the end of the year. “We believe that all five newbuilds are incremental as Saudi Aramco has stated it plans to double its offshore fleet to 90 by 2024 as part of its drive to boost the kingdom’s production capacity by 1 MMb/d to 13 MMb/d by 2027,” Evercore said.
Overall, Saudi Aramco announced 16 jackup contracts this month for a total of 80 rig years, with the majority of the contracts for five years each plus two option years. Only one contract was an extension, with four contracts for active rigs to mobilize to the Kingdom upon completion of current contracts offshore China (two), Brunei and the UAE.
In addition, five idled rigs that recently completed their respective contracts in China, Brunei, Thailand, Qatar, and the UAE will move to Saudi Arabia for new long-term contracts, as well as four previously cold-stacked rigs that operated in Mexico (three) and Vietnam (one). ADES “was the clear winner this past month,” Evercore said, with 13 rig contracts while the balance was awarded to COSL.
Assuming Saudi Aramco renews all 12 jackups scheduled to roll off contract over the course of this year and all new contracts commence on time as planned, Saudi Arabia’s jackup count is expected to increase from 49 to 70 by year-end while another six units are scheduled to begin their new contracts in 2023.
Dayrates have reportedly improved to the high $90s range from the high $70s previously, with 19 tenders still outstanding for multiple drilling and workover rigs for three or five-year terms plus options.
The report also highlighted the below global rig trends over the past month:
* The floater marketed utilization increased by 117 basis points to 81.8% with all segments solidly in the low-80s range while the working floater count jumped 12% to 109 units.
* The jackup marketed utilization increased by 209 basis points to 87% (near the January 2020 high), with Pertamina also contracting a COSL newbuild for offshore Indonesia and reducing the stranded newbuild fleet to 20 units.
06.03.2022
