By Bruce Beaubouef, Managing Editor
The floating rig contract market has slowed and is expected to remain muted through the end of the year and into the first half of 2025, according to Evercore ISI’s latest Offshore Rig Market Snapshot report.
While the significant increase in dayrates and lengthened contract terms are contributors to the “muted” contracting activity, Evercore noted that the “bearish sentiment built around disappointing Chinese demand and limited OPEC visibility are likely pushing decisions on long-term capital commitments.”
The report also noted that 26 contracts (50% floaters) were announced in September. Average contract terms for jackups and floaters were 684 days and 386 days, respectively. In October, only four jackup contracts have been announced so far with an average of 1,057 days, a number that was “skewed by Egyptian Drilling’s Setty [jackup rig],” the report commented.
While the Setty rig has been under contract suspension since April 2024, Saudi Aramco has extended its contract by 10 years. This is expected to keep the rig busy until September 2034. The report noted that Saudi Aramco has indicated that the unit will not return to work anytime soon, and that it will be marketed internationally for the time being.
The report also said that no floater contract had been announced so far this month, and Evercore said that February 2015 was the last time no floater contracts were announced.
For context, Evercore noted that “contracting activity for floaters took a hard hit in 2020, declining (42.6%) to 116 fixtures, which quickly recovered to pre-pandemic levels in 2021, with contract terms meaningfully lengthening.” The report also noted that 86 floater contracts had been announced year-to-date.
