SINGAPORE –Based on Douglas-Westwood’s offshore drilling forecast, there are still plenty of wells to be drilled if the 2015 oil prices average between $50-70/bbl. Total wells drilled could be expected to increase by 17% by 2020 with deepwater wells growing at 32%.
One fundamental issue beyond rig demand is of the industry’s own making. The recent build cycle has increased the supply of rigs, and that will take some time to be absorbed by long-term demand. Like other subsectors of the offshore marine industry such asoffshore vessels and production assets, Douglas-Westwood says supply not just demand will determine the future direction of the offshore drilling market.
Even so, the report says companies in the deepwater drilling market have lost more than half of their value over the last year. While these falls in share prices reflect trends across the oil and gas industry, the number of active ultra-deepwater rigs have remained high with 171 units contracted versus 175 units last January. Day rates have also increased slightly from an average of $470,000 to $485,465, though this is largely a result of contracts signed before the fall in oil prices.