Jack-up drilling company Shelf Drilling, one of the world's largest jack-up contractors by fleet size, has seen another rig contract cut short in less than a week.
After it on Friday said Dubai Petroleum would reduce the length of the Shelf Drilling Tenacious jack-up rig contract so it will now expire in September 2020 instead of January 2022, another rig has experienced similar faith.
Namely, the Oslo-listed drilling contractor on Monday said that it had received a notification from its customer - ExxonMobil - on early termination of the BMC 300 IC design Trident XIV jack-up rig contract.
The contract end date for the jack-up rig, which is working for ExxonMobil in Nigeria, has been changed from February 2021 to July 2020.
While Shelf - which owns a fleet of 36 jack-ups - did not provide any info on the reasons behind the contract shortening, it is safe to say that the current situation with the coronavirus and the low oil prices had an effect.
One other drilling contract, Maersk Drilling, on Tuesday saw its drillship contract significantly shortened. Tullow Oil decided to cut short the contract for the Maersk Venturer drillship significantly.
The Maersk Venturer drillship has worked for Tullow offshore Ghana since February 2018, with an expected end of the contract in February 2022.
"As a consequence of the termination, Maersk Drilling’s revenue contract backlog is reduced by USD 175m covering the period from the end of the contract to February 2022," the Danish firm said.
In a recent commentary, Terry Childs, Head of Westwood's RigLogix, argued that tough times are ahead for offshore drilling contractors. A number of rigs might go idle as a consequence of contract extensions being scrapped, force majeure declarations, and other contract terminations.
Childs said: "The world has been transformed in the past month. Many are predicting a prolonged downturn in the oil market but there remains much uncertainty over its duration and depth
"History tells us that eventually, the markets will recover but in the meantime, operators, rig owners and services companies will once again have to “hunker down” and ride out the storm.