ABERDEEN, UK --AGR Petroleum Services foresees a major reduction in exploration and appraisal drilling in the North Sea this year, continuing into 2010.
At the contractor's annual rig briefing in London, Ian Burdis, vice-president of well management, said the situation in the short term at least would be "challenging," although he expected project activity to start recovering by the end of next year.
Day rates for semisubmersibles in the region will likely drop below $250,000, he claimed. However, "contractors are beginning to stack their rigs rather than accept short-term hires at low rates. This could in turn lead to a return to capacity issues and rising rates once the oil price bottoms out."
Despite falling prices, bidders seem to be holding out in the hope of a better deal, Burdis continued, "but this is creating an artificial market where the true price is not really known." He urged North Sea operators therefore to progress their activity where possible to make the most of the rate reductions and end what he called "the current brinkmanship with drilling contractors."
"To take advantage of the current situation operators must be drill ready and have progressed well preparation in advance. By keeping ahead of the game and committing early to site survey work, companies will be able to maximize activity while rates are low and avoid the delays bad weather can cause during the winter."