Weekly Offshore Rig Review: Go West, Young Man ... West Africa, That Is
Worldwide offshore rig utilization dipped slightly this week as only one idle rig started a new contract, while four rigs came off contracts, pushing utilization down 0.5% to 82.2%. This is a very transitory decline, and utilization will likely climb back above 83% soon. Of the rigs coming off contract, TODCO's 200' MC jackup THE 202 is undergoing inspection after a jacking accident, while two other jackups are going into the shipyard for scheduled maintenance and already have subsequent contracts in place.
Among the rigs going into the shipyard is the Trident IV-A. This 300' ILC jackup has been working in the Mediterranean since 2004, but it will be heading back to West Africa (where it had worked previously) in April 2006 to begin a contract with Chevron.
Rig utilization offshore West Africa has reached its highest levels in more than 3 years, when utilization peaked at 95% in April 2002. Since February 2005, West Africa utilization has remained above 90% with a peak of 98% in September, at which point 45 of 46 rigs were contracted.
Over the last two years, the busiest operators offshore West Africa have been Chevron, ExxonMobil, and Total. Between them, they have contracted nearly two-thirds of the rigs working in this region at any given time. Each of these majors has consistently employed a fleet of rigs ranging from as few as 4 to as many as 10 rigs during any given month. Over that period, each of these companies has averaged 6 to 8 rigs working offshore West Africa at a given time.
Through most of 2005, ExxonMobil has taken the lead employing more rigs in this region than any other company. From March through November, ExxonMobil consitently had 10 rigs contracted with day rates ranging from $47,000 to $225,000 and averaging just over $110,000 per day per rig. So, for nine months, ExxonMobil was spending over $1 million per day on drilling offshore West Africa.
Looking forward to 2006, Chevron looks to take the lead in drilling offshore West Africa. The company already has at least 8 rigs contracted per month through almost the entire first half of 2006, with a peak of 10 rigs already under contract for work in February.
But the majors are not the only game in town, and many independents have been active in the waters offshore West Africa, particularly over the last 12 months. Two years ago, there were eight operators with one or two rigs working in this region. During the second half of 2005, as many as 18 different companies have been drilling with two or fewer rigs. Among these are a few majors with a smaller presence in West Africa, such as BP and Shell, but the majority of these companies are independents.
In fact, during 2005, the highest day rate earned by a rig working off West Africa was paid out by an independent. Nexen contracted Transocean's Deepwater Discovery, a 10,000' drillship, to drill a well offshore Equatorial Guinea at a day rate of $318,500, the highest day rate earned by any rig in 2005.
With rigs moving back into the market and more than 60% of the current fleet contracted through 2006, West Africa seems poised to experience strong growth in the size, utilization, and earnings of its rig fleet.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- USA Commercial Crude Oil Inventories Increase
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call