More Offshore Drilling Firms Likely to Face Similar Situation to Ocean Rig

More Offshore Drilling Firms Likely to Face Similar Situation to Ocean Rig
Many offshore drilling companies are facing a similar situation to Ocean Rig, which filed for Chapter 15 bankruptcy protection in the US Tuesday, and it is likely that more will follow suit.

Many offshore drilling companies are facing a similar situation to Ocean Rig, which filed for Chapter 15 bankruptcy protection in the US Tuesday, and it is likely that more will follow suit, maritime consultancy firm VesselsValue Senior Analyst William Bennett said.

“So far the difficult conditions have seen Hercules offshore go bankrupt and also a number of scares, in particular involving John Fredriksen’s Seadrill,” Bennett said in a statement sent to Rigzone.

Ocean Rig currently owns a fleet of 11 rigs, which consists of nine modern drillships built at Samsung and two semi-submersible drill rigs built between 2002 and 2001, VesselsValue revealed. The live fleet is said to be worth $1.64 billion.

Ocean Rig also has three drillships still on order at Samsung, which are said to be worth a total of $1.24 billion.

“It is quite possible that these drillships are delayed as has been the case for newbuildings across the offshore industry,” Bennett said.

Ocean Rig was said to be suffering from heavy debt and unprecedentedly weak market conditions. In the last 12 months, the value of the company’s fleet has fallen by 40 percent, according to VesselsValue.

Seadrill, battling with $14 billion in debt and liabilities, revealed Feb. 28 that it may have to file for Chapter 11 bankruptcy protection if it fails to reach a restructuring agreement with its lenders.

The total value of Seadrill’s fleet has dropped by more than $3 billion since January 2014, VesselsValue said.

A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist. Email Andreas at andreas.exarheas@rigzone.com

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Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
James Drouin | Apr. 3, 2017
Until gasoline consumption rises out of the doldrums they've been in for the past 11 years, oil prices will remain depressed. And, as long as oil prices remain depressed, the multi-billion dollar projects which require these rigs simply won't recover.

Barry Bryant | Mar. 31, 2017
There is no future for the service industry. Operators taunt technology gains and those gains and technology belong to the service industry which has carried the burden of deep discounts since this began. All savings by the operators are from the backs of the service providers. Meanwhile most operators are continuing with excessive staff where it takes 3 to 5 drilling engineers for each drilling rig running. $50.00 oil will not even pay for their mistakes made and the service industry can not continue the discounting less they all prepare for bankruptcy!


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