Rig Trends: Idle Times Ahead for Offshore Rig Fleet
There is little doubt that the idle and retired rig counts will increase dramatically during the remainder of 2015. Some of it will be due simply to existing contracts coming to an end and/or options not being exercised, but early rig releases will also be responsible for adding to the numbers. Although a total is impossible to say at this point, channel checks suggest that number is currently over 20. For instance, in Southeast Asia alone, there are seven rigs reported to be candidates for early release. Couple that with eight rigs that are due to come off contract by the end of March and newbuilds coming out shortly that currently do not have contracts and it becomes easy to see how fast the idle numbers will add up. Given these kinds of numbers, the question then becomes how many of these rigs will be maintained with crews and how many might be cold-stacked? One factor that may help determine that is the age of the rig fleet. This has been written and talked about on many occasions and many in the industry have called for owners to get rid of old equipment for many years. According to RigLogix, as of Feb. 5, 395 of the 861 (45.8 percent) jackups, semisubs and drillships (excluding under construction units) in the world are 30 years of age or more. Thirty to 35 years, while not an absolute, is generally considered the useful life of an offshore rig. Within the 395 rigs, 271 (68.6 percent) were either working or had upcoming work scheduled. On a side note, the Hercules 120 jackup is the oldest rig in this group at just over 57 years of age. While it is currently working, it will be cold-stacked when it wraps up its current contract in the Gulf of Mexico around March 1. It should be noted that many of these rigs have had substantial steel replacement and/or equipment upgrades over the years so age alone does not necessarily reflect the rig’s current condition, and as evidenced by the numbers, some of these rigs will continue to work well past 30 or even 40 years in some cases. Nevertheless, many of the rigs that ultimately are either cold-stacked or retired will likely come from this group of rigs. Some owners will opt to warm stack certain rigs, keeping a skeleton crew onboard and keeping the rig running, which significantly reduces operating costs and allows the rig to come back into service faster if and when the market improves. Table 1 numerically displays the 395 rigs that are over 30 years old by rig type and region.
Of course, when discussing rig fleet age, the question of contractor fleet ages always comes up. According to RigLogix, rig owners with 20 or more rigs in their fleet (excluding under construction rigs) and an average fleet age of 30 years or more include:
- Shelf Drilling - 37 rigs at 34 years
- Paragon Offshore - 43 rigs at 33.3 years
- Hercules Offshore - 33 rigs at 32.5 years
- Diamond Offshore - 37 rigs at 30.2 years
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Head of Products, Data Services | Rigzone
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