Offshore staff
NEW YORK CITY – Demand for floating and jackup rigs is ramping up worldwide, with operators particularly active for drilling campaigns in the “golden triangle” of the US Gulf of Mexico, Africa and Brazil, according to Evercore ISI’s latest Offshore Rig Market Snapshot.
The oilfield services investment consulting firm based its analysis on 1Q 2024 earnings results.
In the US, Transocean says that it expects that the GoM could be short one rig in 2025. The company noted two independent operators issued tenders (six-month firm term commencing in 1H 2025 with two, six-month options/six-to-nine months of work commencing in 3Q 2025) and two major E&Ps are looking for multi-year programs.
In Brazil, Petrobras is expected to absorb up to 30 rigs through 2030, and the region could require 36 floaters as soon as 2025. Africa is anticipated to drive significant demand and will require at least four rigs from outside the region to satisfy demand in 2025.
Demand in other regions, including SE Asia, the North Sea (high-spec semis are sold out in Norway), and Australia, will drive incremental opportunities for Transocean following contract rollovers.
According to Evercore, Valaris has said that it believes that Brazil, Africa, and the Mediterranean will account for 60%+ of the ~30 floater opportunities with contract durations of 1+ years. Valaris estimates 10 to 15 of these opportunities will be met by incremental reactivations, new builds, or existing rigs moving among regions.
Brazil currently has 31 contracted floaters (six of them have not yet commenced) and is a key driver of the incremental UDW opportunities from Sepia and Roncador tenders, with the potential for another tender later in the year.
Additionally, there are 12+ opportunities in Africa and the Mediterranean (of which six could require incremental rigs), which could increase to ~30 over the next few years.
Demand for floaters remains solid in the US GoM and SE Asia, which could also require incremental rigs in the region.
On the jackup side, the firm noted that Valaris’ active fleet in the North Sea is fully sold out for 2024. Noble highlighted that open demand for floaters currently exceeds 100 rig years, and the solid pool of public tenders represents a decade high, which provides visibility for upcoming contract activity and cash flow.
Noble continues to focus on contracting Noble Globetrotters I/II and the Noble Developer, which are currently hot-stacked or expected to roll off contracts in the near term, while having a few rigs on the sidelines, including the Pacific Meltem.
Overall, Evercore says that a number of factors will continue to tighten market dynamics, including a lack of newbuilds, drillers remaining disciplined about unstacking rigs, and extended contract durations as operators leverage opportunities to lock in acceptable long-term rig pricing to derisk their capital planning. These trends will continue to provide further upside in dayrates, the firm noted.
06.04.2024
