This week, worldwide offshore rig utilization held steady at just above 83%.
In last week's offshore rig review, we examined the likely levels of utilization for the jackup fleet during the rest of 2006. This week, we will take a look at utilization trends and forecast for the floating rig fleet.
Floating Rigs - Semisubs and Drillships
There are another 38 floating rigs under construction right now, 29 semisubs and 9 drillships. However, they will not begin to have much of an impact on the fleet until 2008 and 2009, when most of them will be delivered.
Of the current fleet of 204 floaters, 174 are under contract during the month of August. The resultant utilization rate for all floating rigs is 85%. By looking at the different sub segments within the floater fleet, we'll find different utilization patterns based on the water depth capabilities of the rigs.
Less Than 1,500' WD
Besides being the smallest sub segment of the floating rig fleet, these < 1,500' rigs have the lowest utilization rate of any floater sub segment. Currently, 21 of 32 rigs are contracted for a utilization rate of 66%. Most of those rigs that are not working are cold stacked at this time, with a total of 6 of these rigs in storage. Another 4 rigs are in the shipyard for modifications and repairs, with 2 of them set to start new contracts next year when they finish reactivation and upgrades.
Looking forward to the rest of this year, this segment of the fleet is set to continue at fairly low utilization rates. While only 3 currently contracted rigs will be ending contracts before the end of the year, only one inactive rig is currently set to start a new contract before that time. So, come December, 19 of 32 < 1,500' floaters have ongoing or pending contracts. As such, it is unlikely that utilization for these rigs will rise above current levels before the end of the year. However, in 2007, it is plausible to speculate that utilization could reach 70% or higher.
1,500' to Less Than 4,000' WD
For the month of August, there are 78 of these rigs under contract, which equates to an 85% utilization rate. With a total of 5 rigs set to come off contracts before the start of September, utilization in this segment looks set to dip slightly, possibly as low as 80%, next month. Looking past September, several rigs in this segment will be starting new contracts. At this time, a total of 77 rigs are set to be contracted in December of this year, which is more than were under contract in June or July and only one rig less than current utilization.
Of the rigs that are not currently working within this sub segment, only one rig is stacked. Another 10 rigs are undergoing modifications, and 4 are being inspected at this time. With the rigs in the shipyard, at least two are rigs that had been stacked, and there are several rigs that are being upgraded to greater water depth capabilities. Most of those upgrades are set to be finished this year, with 7 of those rigs set to come out of the shipyards before yearend. That will allow for higher levels of utilization in the future by making more rigs available to work, and all of these rigs already have contracts lined up. As such, utilization among 1,500 to less than 4,000' floaters is likely to push higher than its current level by the end of the year and remain close to 90% in 2007.
Greater Than 4,000' WD
The worldwide distribution of these rigs varies significantly from the other floater sub segments. The US Gulf of Mexico is the single biggest market for these rigs, with 26 rigs in the region. The second and third largest markets are Brazil with 18 rigs and West Africa with 17 rigs.
For the month of August, a total of 74 deepwater rigs are contracted for a utilization rate of 93%. However, the utilization of available rigs is actually at 100%. The six rigs that are contracted this month are in the shipyard for upgrades and maintenance, and half of these are expected to leave the yards and begin new contracts before the end of the year. As such, every deepwater rig that can be working at this point is under contract.
Looking forward to the rest of the year, deepwater rig utilization is set to increase to even higher levels. Currently, 93% of the fleet is contracted through November, and beginning in December 94% of the 4,000'+ rigs will be under contract. With rigs coming out of the shipyards, the number of rigs able to work will rise slightly and utilization will push higher.
For More Information on the Offshore Rig Fleet:
Most Popular Articles