Rig market - July 2010

OE Staff
Friday, July 9, 2010

OE's analysis of current rig market data is updated monthly using statistics provided by Rigzone.com

Worldwide utilization for the mobile offshore drilling fleet is tracking at about 74%, within the tight 74%-76% band it has seen for the past 10 months. However, global utilization is nearly 6 percentage points below levels achieved this time last year. Utilization trends for both jackups and semisubs are relatively flat versus the prior month. Drillship utilization continues to trend lower after peaking early in 2010.

The Gulf of Mexico is on everyone's mind due to the oil spill and ban on new deepwater drilling. Overall utilization had been anemic, in the low sixties, but had been improving prior to April and the Deepwater Horizon disaster. Low natural gas prices and high storage levels for this commodity are seen as the root causes of these weak jackup utilization trends.

Current overall utilization for the Gulf of Mexico rig market is approximately 62%, with 73 out of 117 rigs in the region under contract. Prior to the moratorium, utilization in the Gulf had been trending higher (since bottoming in August 2009 in the mid forties). This upward trend may have peaked if the six month drilling moratorium continues for the 23 semisubs and 8 drillships in the region. In the meantime operators will try to find other work for these rigs considering that they are leasing these rigs at dayrates averaging +$440,000/day. If operators decide to move some of these floaters elsewhere this could aid utilization rates. OE

Categories: North America Gulf of Mexico Rigs

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