Bruce Beaubouef * Managing Editor
Northwest Europe’s jackup market continues to face challenges, including a lack of work and lower dayrates compared to other regions, according to Evercore ISI’s latest Offshore Rig Market Snapshot.
According to the report, this is due to excess profit taxes and uncertain government rules. This is also partly due to the region’s advanced progress in the energy transition, says Evercore, which has led to stricter regulations and environmental activism.
Globally, Northwest Europe ranks highly in terms of the number of jackup requirements, with 17, while only Southeast Asia, India, and West Africa having more requirements. The Middle East, which is a major driver of the jackup market, now has fewer requirements. The report notes that Saudi Aramco has executed 68 separate jackup charters since early 2022 but now has no outstanding demand.
One significant challenge in Northwest Europe is the short-term nature of work, with an average program duration of around 10 months to one year. India has the largest backlog of unfilled work and the longest average duration per requirement globally. The report highlights Southeast Asia as a market that may vie for available North Sea jackup capacity.
The uncertainty in the UK sector regarding the Energy Profits Levy (EPL), the influence of the green lobby in the Dutch sector, and depressed Norwegian demand all contribute to the possibility of more jackup rigs leaving the Northwest Europe market, Evercore says.
The jackup forecast for Northwest Europe suggests an average demand of 26.9 units in 2024 against an average marketed supply of 29.6 units, resulting in an average marketed surplus of 2.7 units, says Evercore. In 2025, the average demand is expected to be 26.4 units from an average marketed supply of 30.0, with an average marketed surplus of 3.6 units.
10.16.2023
