Day Rates Break Over US $100K as Rig Utilization Climbs

Rig contractor Transocean has agreed to a day rate of $103,000 for the cold-stacked semi-submersible Sedco 712 with Canadian independent Oilexco. The deal is $12,000 higher than Transocean's last similar contract and reflects the growing lack of available rigs in the North Sea.

Rig utilization in September rose 5.9% from August to 84.1%, the fifth consecutive month-on-month increase, putting usage almost 20% up on a year ago, according to Platts North Sea Letter data.

Five semis have come out of long-term lay-up this year and Diamond's Ocean Nomad is scheduled to return to the North Sea from West Africa next month. Another rig is also thought likely to relocate from West Africa to the North Sea by year's end.

"Contractors are predicting standard semi day rates in the UK way in excess of US$100,000 for 2005 and the market certainly appears to be moving their way," said North Sea Letter rig market editor Ross McCracken. "In addition, utilization for jack-ups has improved, moving close to 100% in September, while forward rates also rose strongly. Demand still remains significantly below that for semi-submersibles, however."