North Sea Rig Utilization Falls to Seasonal 12-month Low

Rig utilization in the North Sea dropped to 65.7% in February, almost exactly on a par with last year, according to Platts North Sea Letter.

As with 2003, it is likely to prove the low point of the seasonal cycle, although indications for March show utilization remaining at the same level as in February. Utilization six and twelve months forward is also marginally down on last year.

The real change, however, has been the declining fortunes of the standard specification jack-up segment, in comparison with rising employment for semi-submersibles. Eight rigs are scheduled to either end or start contracts in March. The idle rig count for jack-ups should rise by three and that for semi-submersibles fall by three.

"While there are 19 semi-submersibles idle in ports around the North Sea, seven are formally coldstacked, with at least one other inoperable at short notice. In addition, a further eight rigs have contracts lined up to start in the next three months", said North Sea Letter rig editor Ross McCracken. "This leaves a fairly small pool for operators to choose from for new tenders, and dayrates have been rising as a result."

In the jack-up segment, the market is very tight for heavy-duty rigs, with the number of tenders outweighing availability. However, for standard units, the idle rig count will continue to rise as there are units due off contract but no new starts until June. Even then, the number of available rigs outweighs the number of tenders and enquiries by almost two to one.

The North Sea area is taken to include the UK, Norwegian, Dutch, Danish, Irish, German, French, Spanish and Faroese sectors, excluding the Mediterranean.

Platts North Sea Letter is a key source of timely and accurate information on the North Sea oil and gas industry. Published weekly, it offers detailed coverage on all aspects of upstream activity on the Northwest European Continental Shelf and for 25 years has been a leading source of news to which professionals regularly turn.