Some Asian Drilling Firms Plan to Carve Niches in Current Downturn
Prospects for dayrates for jackups are not rosy, according to DVB Bank’s Vice President for Offshore Finance Sidat Senanayake, as approximately one third of the rig market is working in the exploration space, which has been affected by the industry's cost-cutting exercise.
Dynamic Drilling Pte Ltd., an Indian company based in Singapore with a focus on Southeast Asia, Indian Ocean, Middle East, Africa and Mexico, noted that drilling contractors are used to the ups and downs in the market as this is a cyclical industry.
Seen in that light and in spite of the current pressure on dayrates, Dynamic Drilling is optimistic about securing a contract for its jackup Dynamic Momentum (350’ ILC), which is due for delivery in the fourth quarter of 2015 from Cosco Dalian’s yard in China.
“We are already discussing contracts with the oil companies. The pricing is going to be low for the contract, but that is OK,” Manav Kumar, director at Dynamic Drilling said at the Singapore Offshore Finance Forum.
Still, Dynamic Drilling is looking ahead to a more efficient rig industry, following the run-up in costs in recent years.
“We can tighten our belts … last 3 to 4 years have been great [for dayrates] but it has been a headache for drilling contractors because costs keep on rising. We were looking at between a 50 and 70 percent rise in manpower costs every year,” Kumar explained.
With the current downturn in the market, “drilling contractors’ rates are going to come down and the costs for drilling contractors are going to come down. This may be a good thing,” he added.
Like Dynamic Drilling, Opus Offshore Pte Ltd. – another Singapore-headquartered drilling services provider – is currently holding discussions with oil and gas companies to secure contracts for its Tiger 1 (DW drillship) and Tiger 2 (DW drillship) that are being constructed in China.
Opus appeared confident about securing drilling assignments for the two conventionally moored drillships which can operate in water depths of up to 5,000 feet as they are more cost effective than their ultra-deepwater counterparts working in the mid-water segment.
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