April 1, 2004
Deepwater rig market set for upturn
The lack-luster performance of the deepwater rig market over the last two years is coming to an end as operators realize that with no new rig orders in the pipeline demand will eventually surpass supply.
The latest edition of The Deepwater Rig Market Report, issued by Houston-based ODS-Petrodata Consulting & Research, says that after falling for two years, demand for deepwater rigs is expected to resume its growth pattern during 2004. However, with four new rigs poised to join the fleet in the next twelve months, only one of which has an initial contract in place, an excess of equipment will exist until at least 2007.
While utilization of the newest and best-equipped rigs will remain high, day rates for these units will only slowly rise to the levels that were expected when they were built.
"Interestingly our forecasts now show that the increase in rig demand will be almost impervious to changes in oil prices, unless they fall below USD 20 per barrel," said Tom Kellock, a senior consultant in ODS-Petrodata's Consulting & Research practice and product manager for this report and its sister publication World Rig Forecast - Long Term Trends.
"With oil prices now forecast to stay on a higher plateau than was previously expected, the sensitivity to fluctuations of as much as USD six or seven per barrel has basically evaporated."
Including 50 tables and charts, ODS-Petrodata's Deepwater Rig Market Report is the industry's only regular published forecast of global offshore deepwater rig activity.
This issue contains a number of changes: forecasts of demand for deepwater floating rigs (semisubmersibles and drillships) are now presented on a quarterly instead of annual basis and extend out to the year 2012, while day rate projections are now given for five rather than three different rig categories and the time horizon has been extended to the end of 2008.
The report includes individual forecasts for each of the world's major deepwater drilling regions, the Gulf of Mexico, Latin America and West Africa. Deepwater activity in North West Europe, the Mediterranean and the Asia/Pacific region is also covered in the report.
ODS-Petrodata's Deepwater Rig Market Report is available by annual subscription, which includes access to the report's authors for further explanation of the material presented.