Operators consider novel rig deals to limit day rates
Offshore staff
LONDON — Offshore rig rates hit a nine-year high last year, according to a report from Westwood Global Energy Group subsidiary RigLogix.
Day rates for jackups, semisubmersibles and drillships averaged $118,000, $368,000 and $419,000, respectively, 54% up on the figures for 2021.
However, the inflationary prices, caused by a combination of higher global rig demand, rising rig use and tightening availability, have also led to a slowdown in contracting activity, said RigLogix Director Teresa Wilkie.
Operators have been investigating ways of keeping their future projects economic, while at the same time deliberating more over rig selection, especially for long-term campaigns.
TotalEnergies’ solution, under a recent deal with Vantage Drilling, was to acquire a 75% majority stake in the ultradeepwater 7th generation drillship Tungsten Explorer. This involves forming a joint venture with Vantage, which will retain a 25% interest in the 2013-built vessel, and will also continue to manage its operations for 10 years.
TotalEnergies’ Chairman and CEO Patrick Pouyanné said the company opted for this arrangement to help keep costs down while rig day rates continued on an upward track. He also hinted that the company could enter more such arrangements in future.
Last June, the company issued a tender for two ultradeepwater drillships for up to 10 years each, with one rig to operate exclusively offshore Angola while the other would undertake exploration and development drilling offshore Angola, Namibia and Suriname.
According to Wilkie, the first deal has been awarded and a similar ownership agreement could follow for the second rig.
Petrobras and Mitsui also have a joint venture, P&M Drilling International, which owns the ultradeepwater drillship Petrobras 10000. Transocean manages the rig, which has operated for Petrobras since 2009, and it has an arrangement with P&M to acquire the rig under a 20-year capital lease contract.
Elsewhere, ONGC owns and operates six jackups and two drillships, alongside the 34 rigs it rents from other drilling rig owners.
And in the Norwegian North Sea, the Equinor-led Oseberg and Gullfaks licensees own two Cat-J jackups, Askepott and Askeladden, both managed by KCA Deutag, for use in exploration and development drilling.
US-based E&P company Arena Energy has multiple affiliates that manage various activities, including White Fleet Drilling (WFD), which was formed in 2017. WFD presently owns the jackups WFD 250, WFD 350 and WFD 400, all managed by Enterprise Offshore Drilling during operations.
As of last month, said Wilkie, two of the five jackups working in the US Gulf were WFD rigs working for Arena Energy affiliate Arena Offshore.
For offshore operators seeking long-term rig capacity of more than 10 years, this could be a solution to stabilizing project economics, she added. Although there are no other known 10-year (or longer) tenders out in the market, certain supermajors and NOCs have three- to five-year requirements for jackups and floating rigs.
From the drilling contractor’s viewpoint, joint ownership arrangements can provide secure, long-term revenue streams, Wilkie added. With the Tungsten Explorer, the sale of a majority interest also gave the company almost $200 million in cash.
04.24.2024
