Weekly Offshore Rig Review: Limited Availability
Worldwide offshore rig utilization inched up slightly this week as two idle rigs started new contracts and one rig went off contract. The worldwide utilization rate now stands at 84.5%, which is the highest utilization rate seen this year, and surpasses peak utilization for all of last year as well.
With current offshore rig utilization pushing new highs, we'll take a look forward at future utilization by examining the fleet availabilty with in the jackup, semisub, and drillship segments.
Among jackup rigs, current utilization stands at 87.2% with 341 of 391 jackups under contract worldwide. Looking forward to the rest of 2006, 75% of the available jackup rig time has already been contracted, and only 25% remains. Looking further out, for 2007, 46% of the available rig time for currently active jackups has already been contracted out, leaving about 55% of the jackup fleet's time still available for new contracts in 2007. And for 2008, only about 23% of available rig time for currently active jackups has been contracted.
Among semisubs, 143 of 165 rigs are under contract, providing current utilization of 86.7% worldwide. For the rest of 2006, those 165 semis have about 86% of their time already locked into contracts, leaving just 14% availability among semisubs for the rest of the year. For 2007, about 73% of the rig time for currently active semisubs has been locked into contracts. While in 2008, availabilty finally reaches above 50% for semisubs, with only about 48% of the rig time for active semis having been contracted.
Among the world's 38 drillships, 29 are currently under contract for a worldwide utilization rate of 76.3%. During the rest of 2006, among the world's leading drillship contractors whose ships account for 32 of 39 active rigs (82% of the fleet), 90% of available rig time has been contracted. Looking at the availability of those drillships in 2007, more than 92% of the available drillship time is already under contract, with the remaining time representing primarily maintenance downtime. Even for 2008 84% of the available rig time for these drillships is already contracted.
Looking at the overall picture for MODU availability, the rest of the year has little room for new rig contracts, with 78% of available rig time already contracted. As the year progresses, 9 new build jackups are set to be delivered, which will help to provide some additional rig time, but 5 of those new jackups already have at least one contract set to start when they leave the shipyards. Another 21 jackups will be delivered in 2007, and only 3 of those rigs have contracts setup for when they leave the yards, so there will be even more jackup availabilty in 2007.
In the fleet segments with the least availability, semis and drillships, only one new drillship is set to be delivered late next year, which will have little effect on the lack of availability. An additional semisub is also scheduled to be delivered late next year, but it is already contracted.
Availability Among Top Rig Managers
The table below provides a breakdown of contracted rig time for the next 2.5 years among the world's largest offshore rig managers, based on current fleet size. Transocean has the highest level of contracted rig time, which means that the world's largest offshore driller has revenues locked in for the next several years, but it also means that the company has much less exposure to increasing day rates than its competitors. At the other end of the spectrum, TODCO has less than half of its jackup fleet's time contracted for the rest of this year, placing it far below the average of 74% time contracted among all major jackup managers.
|Manager||Cur. Rigs||Rigs K||% Time K||Rigs K||% Time K||Rigs K||% Time K|
- Cur. Rigs - number of rigs currently in fleet
- Rigs K - number of rigs under contract during that year - % Time K - percentage of available rig time already contracted
The worldwide offshore rig fleet is pushing new high levels of utilization, and a majority of the fleet's available time is contracted out through 2007. With 30 new jackups being delivered over that time period, some new availability will be added, but only within the jackup fleet, which has the lowest level of commited rig time among the three major MODU types. The tight market amongst drillships and semisubs will persist into 2008, when 11 new semisubs and 3 drillships are set to be delivered. But, with many of those rigs already landing contracts or not even beginning construction until long-term contracts were already in place, available rig team will continue to be limited.
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