Offshore staff
NEW YORK CITY – Deepwater drilling rig contracting activity is picking up, according to the latest Offshore Rig Market Snapshot from Evercore ISI.
At the same time, the firm notes that “overall offshore rig contracting activity remains light with 26 new contracts and options announced thus far in May, tracking slightly behind pace from 31 a year ago.”
However, deepwater contracting activity has picked up, Evercore says, driven by recent FIDs for development projects. “We count three deepwater FIDs year-to-date: Shell’s Dover tieback in the US Gulf of Mexico, ExxonMobil’s Uaru project off Guyana, and Equinor’s MB-C-33 development offshore Brazil.”
The firm says that these projects support recent term contracts for drillships including Shell’s five-year contract for the newbuild Stena Evolution and ExxonMobil’s award of 6.3 years of additional backlog to three Noble drillships. Equinor’s rig tender for MB-C-33 remains outstanding, but the company awarded TechnipFMC a major (>$1 billion) iEPCI contract for the entire subsea system as well as life-of-field services.
In addition, Petrobras recently awarded Noble a 2.5-year contract for the Noble Faye Kozack for the BM-S-11 and Tupi fields offshore Brazil.
In terms of the overall drilling rig contract market outlook, the firm says that “with both floaters and jackups averaging near 90% marketed utilization, we expect contracting activity to remain light for the foreseeable future.”
However, Evercore added that deepwater FIDs should continue to accelerate, noting that Wood Mackenzie is tracking 18 projects that should be sanctioned later this year. These projects represent more than $80 billion in capital spend to develop more than 9 mmboe of reserves.
05.15.2023
