Offshore staff
NEW YORK CITY – The 1Q 2024 earnings season has wrapped up for offshore drillers, and the results highlight “robust momentum and broad-based offshore growth,” according to Evercore ISI’s latest Offshore Rig Market Snapshot.
Offshore drillers are reporting incremental activities in both shallow and deepwater areas, and tight rig supply continues to drive utilization and dayrates higher, according to the report.
The report cites information from Rystad Energy, which projects that offshore upstream capex is expected to grow by 10% in 2024 and at a CAGR of 7% over the next three years ($228 billion in 2026E).
Offshore FID activity is also expected to remain robust, totaling $103 billion between April and December of this year, including both conventional shelf and deepwater areas. Both Latin America and Africa will be hot spots for deepwater activity the report said, citing Wood Mackenzie data.
“The longevity of the offshore upcycle remains robust,” the report commented, and that upcycle bodes well for offshore drillers and services companies that are “levered to offshore to capitalize on long-term, sustainable growth.”
A lack of newbuild rigs and disciplined rig reactivations continues to tighten supply and demand dynamics, exemplified by materially lengthening fixtures, the report noted. Given these market dynamics, the report also noted that offshore drillers are actively engaging with operators on rigs that are not scheduled to roll off contracts for one to three years.
05.18.2024
