Mobile drilling unit utilization at highest level in 10 years
Offshore Data Services
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Worldwide, 139 mobile offshore drilling rigs are idle as of early March, but little study of the list of idle units is needed to determine that available rig capacity is extremely limited. Fleet utilization is at levels not seen for more than a decade, and the near balance in rig supply and demand that characterizes the current rig market appears sustainable for the immediate future.
Of the 139 rigs recorded as idle by Offshore Data Services as of early March, 57 have contracts or contract commitments, and therefore are not available to work. (This number includes non-competitive rigs that are owner-operated and are considered "committed" by virtue of their ownership status.)
The remaining idle rigs are uncommitted as of early March, although several of these units are expected to have contract commitments in the near future. The list of uncommitted rigs presents a clear picture of the tight rig supply situation. An objective look at the rigs reported by their owners as "stacked ready" reveals that many in fact have been stacked for some time, and may not actually be available for immediate work. In addition to the need for reactivation, qualified crews are not readily available.
Only a handful of jackups are available and ready to go to work in any given region, and no semis are available anywhere for immediate work. In the US Gulf of Mexico, twenty jackups and four semisubmersibles are idle. However, only five jackups are "stacked ready" and actually available to work immediately, and none of the five are premium cantilever units. Not one of the four idle semis in the region are ready for immediate work.
Rig availability is even tighter in Northwest Europe. No jackups or semis are available for immediate work in the area. A number of drilling programs have been postponed or suspended indefinitely because rigs are not available.
The situation is the same in other parts of the world, and for the first time in many years rig owners actually have a little control over their own destinies. With the available drilling fleet working effectively at close to 100 percent utilization, rig owners can roll over existing contracts or ink new ones at improved day rates, and operators have incentive to sign on for longer-term commitments. With better contract terms, rig owners are financially able to resist the pressure to reactivate idle rigs for short-term projects, and few of the currently idle units are likely to return to work for anything other than relatively long-term commitments.
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