Report: Saudi Aramco continues to drive jackup contracting activity

Offshore staff

NEW YORK CITY – Ten multi-year jackup contracts were signed over the past 30 days, with Saudi Aramco continuing to drive the bulk of the activity according to Evercore ISI’s latest Offshore Rig Market Snapshot.

Over the past month, PEMEX and Saudi Aramco secured five jackups each for a total of 15 and 25 years respectively. The report noted that while these are the first two-year contracts from Pemex since the start of the pandemic, which has been awarding short extensions over the past couple of years.

Meanwhile, Saudi Aramco has awarded 46 multi-year contracts year-to-date or 70% of all Middle East and 45% of all global term jackup contracts.

On a rig-year basis, Saudi Aramco secured 200 rig-years of work or 76% of all Middle East and 51% of all global jackup days awarded. From 53 jackups under contract currently, Saudi Aramco’s rig count is poised to increase by 35 units over the next 12 months to a new peak of 79 by October 2023, adjusting for 10 rigs under contract currently but rolling over.

The report noted that five idle units within Saudi Arabia are undergoing acceptance testing for new contracts starting before year-end, but another 30 units are mobilizing to Saudi Arabia from the UAE (13), Bahrain (5), and China, Mexico and Singapore at three each, plus the Bahamas, Indonesia, and Malaysia for new contracts.

“We expect Aramco to renew all 10 jackups rolling off contract over the next year, with ADES the likely acquirer of the Valaris 54 as it firms up its leading 37% market share, followed by ARO Drilling/Valaris at 21% and COSL and Shelf Drilling with 10% share each,” Evercore commented.

11.21.2022