Super-sized offshore wind projects and vessel capacity
Offshore wind turbines are growing in size as technology advances but installing them could be a headache for operators as demand will outpace the supply of capable vessels by 2024, Rystad Energy research shows. Operators will have to invest in new vessels or upgrade existing ones to install the super-sized turbines that are expected to become the norm by the end of the decade, or the pace of offshore wind installations could slow down. As the energy transition accelerates, demand for offshore wind turbine installation vessels worldwide, excluding China, will rocket from 11 vessel years in 2021 to almost 79 vessel years by 2030.
Higher oil prices and offshore rig demand
Since the start of the Russian invasion of Ukraine, oil prices have mostly stayed above USD 100/bbl. Most offshore rig contractors are not expecting an immediate pick-up in demand. However, E&P companies are indicating that they are making near-to-medium term plans at oil prices of USD 80/bbl, which is much higher than the market has seen in several years. Therefore, the increase in rig demand that had been underway since early 2021 is expected to continue to ramp up. Esgian Rig Analytics is reporting March 2022 competitive utilization of 73%, with a number of future commitments that will push up the utilization rate.
—Cinnamon Edralin, Esgian
Rig utilization rate dips from December through February
The offshore drilling market has retracted slightly over the first couple months of the year. The total number of jackups, semis, and drillships under contract decreased from 445 in December to 436 through February. At the same time, the global supply of rigs remained flat over the period at 681 units. With that, utilization dropped from 65.3% in December to 64.0% in February. Meanwhile, the number of rigs working worldwide saw the tiniest of increases to 413 units through February from the 412 working in December, though it was actually higher in January.
—Justin Smith, Petrodata by IHS Markit