North Sea Rig Utilization Rebounds to 70% in May

Rig utilization in the North Sea moved back to 70% in May, up 2.0% from the month before, but still substantially down on a year earlier, despite departures having reduced the overall rig pool, according to Platts' North Sea Letter data. However, the rate is set to go higher in the next few months as increased usage of semi-submersibles outweighs a weak market for jack-ups.

"Utilization for semi-submersibles, excluding cold-stacked rigs, should reach 100% in the UK sector and above 95% in the Norwegian sector in the next two months" said Ross McCracken, rig editor for North Sea Letter.

Forward utilization rates for the North Sea as a whole are stronger than last year, suggesting an improvement in activity. However, again, while the semi-submersible market looks strong and expectations are of further requirements in 2005, major users, such as Maersk and Shell, have lower jack-up requirements for 2004/05 than this year. The jack-up GSF Adriatic XI leaves the North Sea this week for Singapore and contractors are talking of further strategic relocations for standard specification rigs.

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