Deepwater Drillship Rates Rising

February 20, 2020

Stena Icemax - Image by Iulian Hirlea / MarineTraffic
Stena Icemax - Image by Iulian Hirlea / MarineTraffic

In another sign of improving deepwater market conditions, drillship day rates are on-the-rise from Canada to China, judging by a new report by numbers crunchers, Rystad Energy. 

Although not the only deepwater floaters, drillships are still on order at Asian shipyards, just as drillship day rates approach the $300,000 mark.

It’s still about half the earnings they once commanded, and last week Transocean could trumpet the terminated orders for two newbuild drillships, as the deepwater giant recorded rising maintenance costs. 

Rystad, however, noted the average rate for these vessels so far in 2019 was up 14 percent over 2018 averages. The leading drillship earner also happened to be the Stena IceMAX, which signed with China National Offshore Corp. to drill three wildcats at the Flemish Pass off Newfoundland, Canada, in 2020 at a reported day rate of $299,000. 

“The Stena IceMAX specializes in operating in harsh environments and was contracted at a significantly higher rate than its benign counterparts, proving the point that the premiums commanded by harsh-environment rigs are not slowing down.” the Rystad report’s author said. 

Transocean's under-construction drillship, Deepwater Titan, has, however, already secured a Gulf of Mexico “full operating day rate” of $455,000 with Chevron, although start time isn’t until 2021. 

In all, Transocean has nine drillships earning well over $300,000, with the Deepwater Conqueror earning $582,000 in the GoM with Chevron, one of several contracts over $450,000 that were struck between July 2016 and September 2018. 

The Rystad reporting suggests new drillship contracts are not only rising in price but in term. 

They note Diamond Offshore’s drillships, Ocean BlackHawk and Ocean BlackRhino secured rates of $280,000 with Woodside in Senegal in work that’ll entail no fewer than 18 wells and four years of drilling. 

“The drillships are both capable of performing full dual activity and have dual blowout preventers (BOPs), a hookload rating of 2.5 million pounds, and a rated drilling depth of 40,000 feet,” the Rystad report said.



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