Offshore staff
NEW YORK CITY – In its December 2020 Offshore Rig Market Snapshot, Evercore ISI notes that only four contracts were announced within the month, trailing below 20 as of this point a year ago. Contracting activity is on pace to track lower for the third straight month and tenth time this year, with the full year contract count falling by 45% for both floaters and jackups from 2019 levels.
All four contracts announced in December were for jackups, including a three-year contract for Hokchi Energy using a relatively new COSL rig for offshore Mexico. The Gusto-designed COSL newbuild operated in the East China Sea for CNOOC for one year and will be COSL’s fourth jackup in Mexico.
Dayrates were not disclosed, but could be in the $70-80kpd range, contrasting sharply with a new $275kpd contract for the harsh high spec rig Maersk Integrator, a low-emission jackup contracted for $14.3 million over 52 days or an implied $275kpd including mobilization but excluding integrated services and potential performance bonuses.
The Gusto-designed 500-ft rated jackup has worked without interruption offshore Norway since mid-2015, with the dayrate trending from $425kpd in its maiden voyage to an upcoming low of $425kpd before revising higher to the newly contracted $275kpd rate next summer. With Brent climbing sharply higher over the past six weeks to $50, Evercore notes that it is “cautiously optimistic that contracting activity could accelerate in January as budgets reset.”
Meanwhile, contractors continue to retire older assets with two jackups and a semisub scrapped over the past month, bringing the YTD total to 16 jackups and 24 floaters. Rig contractors deferred all newbuild floaters but took delivery of 12 jackups, resulting in a modest four unit or 1% decline in the global jackup supply. In contrast, floater supply fell by 10% this year and is down 34% from the 2014 peak.
12/21/20
