Report: Drilling contracting activity slows as operators take pause

Offshore staff

NEW YORK CITY – Drilling contracting activity has slowed in March with only a few contracts announced so far this month, according to Evercore ISI’s latest Offshore Rig Market Snapshot.

This follows a “busy” February where five drillships and four jackups secured new multi-year terms. This included a new three-year contract from Petrobras for the Valaris DS-8, which was cold stacked at the start of the pandemic, as well as new one-year extensions for two Stena drillships operating offshore Guyana for ExxonMobil.

With all available sixth and seventh-generation drillships spoken for and only eight floaters rolling off contract over the next few months, “contracting activity is likely to remain limited in the near term,” the firm said.

“Meanwhile we count 14 cold stacked and 12 newbuild drillships available, of which seven are scheduled [to be] delivered this year,” Evercore said in the report. This includes the 99% finished seventh-generation CAN-DO, the lone Singapore-based drillship transferred to Rigco Holding Pte Ltd following the merger of Keppel and Sembcorp Marine; and the reportedly 74% completed Guarapari, one of four remaining floaters originally ordered for Sete Brasil.

“We believe [that] four or five newbuild drillships from the South Korean yards are more likely to be delivered, including the Valaris DS-13 and Transocean’s Deepwater Aquila from DSME; and the Stena Evolution (former Ocean Rig Crete) and Dorado from Samsung,” the firm commented. 

“Recall [that] in December 2021, Stena Drilling paid $15 million for the option to purchase the Crete for $245 million,” Evercore said. “While the purchase option has yet to be exercised, preparation of the seventh-generation drillship is underway with the rig leaving the shipyard for sea trials.”

03.15.2023