Weekly Offshore Rig Review: Diving Into the SEA (SE Asia )
Worldwide offshore rig utilization inched up again, rising back to the 83% mark after having dipped down into the 82nd percentile for several weeks.
Continuing our examination of the largest offshore rig markets in the world, this week we will look at the Southeast Asia market.
With a current fleet of 31 jackups, 11 semisubs, 5 drillships, 7 barges, and 15 tenders, the Southeast Asia rig fleet is the world's fourth largest behind the GOM, North Sea, and Persian Gulf. Its 31 jackup rigs put the region on par with the North Sea, India, and Mexico, all of which are about even in terms of jackup fleet size, each with about 30 rigs.
The Southeast Asia market is the world's largest market for tender rigs. There are currently 15 tender rigs in the region, of which 12 are under contract at this time, earning an average day rate of about $50,000. Around the world, the only other significant market for tender rigs is offshore West Africa, where 6 out of 7 tender rigs are currently under contract.
Among rig managers supplying tender rigs, Smedvig Offshore A/S is the clear leader. The company manages 11 tender rigs and has 2 tender rigs under construction, one in Singapore and one in Malaysia. Of those 11 tenders, 9 are working in Southeast Asia, and all of them are currently under contract.
In terms of demand for rigs in Southeast Asia, Shell is the leading operator in the region with 8 rigs currently under contract. Of those 8 rigs, 4 are working offshore Malaysia and 4 are working offshore Brunei. Following closely behind Shell is Petronas Calagari, which operates 7 rigs in the region, including 6 offshore Malaysia and 1 offshore Vietnam.
Over the course of the last five years, the region has experienced some significant growth. From a total of 39 jackups, semis, and drillships in January 2001, to a total of 56 those rigs working the area this month, a total of 17 more rigs are now working in the waters of this region. That is a 43% increase over those 5 years. However, the fleet is somewhat smaller today than it was about 2 years when in reached a peak of 60 rigs. Part of the growth leading up to that peak was fueled by the high utilization in the area during the 2002 and early 2003 time period, when utilization climbed above 90%.
Today, utilization rates are again near 90%, a trend which has helped to drive day rates up nearly 20% over the last year. And looking forward to the rest of 2006, day rates are set to climb even higher. With nearly 70% of the current fleet already contracted out into at least September, and the average day rates for those contracts well over $80,000, there's little doubt that the Southeast Asia market will experience at least another 20% increase in day rates over the course of the next year.
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