Weekly Offshore Rig Review: Goings on Down Under

Worldwide offshore rig utilization remained steady this week at 82.7%. It has been two weeks since the last edition of the Weekly Offshore Rig Review, and in that time, utilization has moved up slightly, as a net total of two rigs have gone on contract.

The past week has seen some important news coming from down under, as both Australia and New Zealand have made important announcements that concern the offshore oil and gas industry. Australia has finally settled its boundary dispute with East Timor, which should allow resource development in disputed areas of the Timor Sea to proceed. The New Zealand government has announced the green-lighting of the Maari and Tui field development projects, as well as opening up the Great South Basin to licensing in 2006.

These developments help to highlight the growing importance of Australia and New Zealand as offshore rig markets. Over the last 4 years, the Australia region has grown significantly in terms of total rig demand.

In the fourth quarter of 2001, there were seven rigs working in the waters of Australia and New Zealand. This included one jackup, four semisubs, and two platform rigs. That number dipped during 2002 when there were only five rigs working there at the start of the third quarter. But the number of rigs in the region and the demand for those rigs has risen steadily over the last two years.

The fourth quarter of this year has seen the number of rigs in Australia and New Zealand climb to new highs. During October, there were 15 rigs in this region, of which 11 were under contract. Compared with the low of 2002, that is a 300% increase in the total number of rigs and a 220% in the number of rigs contracted.

Looking forward to the first half of 2006, there are already 12 rigs with contracts for work offshore Australia and New Zealand. That will be the greatest number of rigs working in those waters at any point in the last 5 years, moving beyond the high of 11 working rigs set this year.

And now, with the opening of new basins and settling of disputes, rig demand in Australia and New Zealand is poised to stay strong and continue rising well into 2007.