Weekly Offshore Rig Review: Jackup Lovers

Worldwide offshore rig utilization has held quite steady recently. This week, utilization stands at 83.3%, deviating only slightly from the previous week and in line with utilization rates of the last several months.

As we continue our ongoing examination of the offshore rig market, this week we will be looking at the companies that are contracting the largest competitive jackup fleets in the world. Looking at this information over the past year and into the future helps to paint a picture of which operators have been and will be the most active.

The table below outlines the leading operators around the globe that currently have the largest fleet of competitive jackup rigs under contract. In addition, each company's overall share of the competitive jackup rig fleet is shown. It is worth noting that the inclusion of non-competitive rigs alters the rankings somewhat, with ONGC pushing into second-place with 20 jackups contracted.

Current Leading Operators of Competitive Jackups
As of February 22, 2007
Operator Jackups Share
Pemex 25 rigs 7.1%
Chevron 18 rigs 5.1%
Saudi Aramco 15 rigs 4.3%
Maersk Oil 12 rigs 3.4%
ONGC 12 rigs 3.4%
ADMA/OPCO 11 rigs 3.1%
Petrobel 11 rigs 3.1%
Shell 10 rigs 2.9%
Total 10 rigs 2.9%
Rasgas 9 rigs 2.6%
Apache 8 rigs 2.3%
CNOOC 8 rigs 2.3%
ConocoPhillips 6 rigs 1.7%
Newfield 5 rigs 1.4%
Energy XXI 4 rigs 1.1%
ExxonMobil 4 rigs 1.1%
Petronas Carigali 4 rigs 1.1%
All Other Operators 138 rigs 39.4%
Not Contracted 40 rigs 11.4%

Looking at this list of companies, it is quickly apparent that state-controlled (or partially state-controlled) operators generate a very large portion of the world's jackup demand. Of these top operators, 8 of 17 (47%) are state companies. Between just these top eight state companies, they have just over 27% of the world's jackup fleet contracted.

Looking at the current picture of rig contracts as of today is useful, but a more comprehensive picture can be gained by looking back over a longer period of time. The table below presents the number of competitive jackups and days contracted throughout 2006 for the top operators of these rigs that had at least 1,500 rig days contracted during 2006.

Leading Operators with the Most Competitive Jackup Days Contracted
For Calendar Year 2006
Operator Jackups Days Contracted Avg Day Rate Total Day Rates Paid
Pemex 29 rigs 8,950 days $75,735.29 $596 million
Chevron 29 rigs 7,330 days $100,057.02 $680 million
ONGC 16 rigs 5,720 days $55,201.90 $320 million
Saudi Aramco 15 rigs 5,472 days $88,700.00 $485 million
Total 14 rigs 3,637 days $106,103.70 $401 million
Petrobel 11 rigs 3,524 days $77,506.25 $297 million
Shell 12 rigs 3,492 days $90,555.56 $326 million
ExxonMobil 13 rigs 3,053 days $114,130.00 $358 million
Rasgas 8 rigs 2,915 days $59,461.54 $172 million
Apache 19 rigs 2,817 days $122,442.86 $362 million
Maersk Oil 10 rigs 2,752 days $125,181.82 $326 million
ConocoPhillips 8 rigs 2,170 days $142,636.36 $300 million
Newfield 13 rigs 1,705 days $111,391.30 $209 million
BP 7 rigs 1,681 days $109,291.67 $190 million

When looking at the total number of jackup rig days that were contracted over the course of 2006, a useful guide to operator activity is the average length of those contracts. In the table above, it is clear that Rasgas is obtaining much longer contract terms than Apache given that both companies contracted a similar number of rig days, but Apache contracted those days to more than twice as many different rigs.

To look at this in more detail, the table below presents the operators that have the longest average contract lengths for competitive jackup contracts that have occured since the start of 2006, including ongoing contracts. Only companies that have had at least four competitive jackups contracted since January 2006 are included, and only those companies with average jackup contract lengths of at least one year are shown.

Longest Average Contract Lenghts
For Contracts Since Jan. 1, 2006
Operator Jackups Avg Contract Length
Saudi Aramco 15 rigs 1420 days
ONGC 16 rigs 1100 days
Statoil 4 rigs 955 days
Pemex 29 rigs 830 days
Maersk Oil 12 rigs 755 days
Occidental 5 rigs 630 days
Petrobel 11 rigs 619 days
ENI 4 rigs 492 days
Rasgas 8 rigs 431 days
Petronas Carigali 6 rigs 418 days
Talisman 5 rigs 395 days
BP 7 rigs 382 days
Worldwide Average 318 days

While all of the operators shown in the table above have longer than average jackup contract lengths, Saudi Aramco stands out from the pack, with its average contract length nearly one year longer than the next company in the list. From another perspective, Saudi Aramco has locked rigs into contracts about 4.5 times longer than the average for all operators.

Beyond looking at the past and current competitive jackup contracts, we can also look forward to the contracts that will be ongoing during the next two years. This is a good guide to which operators have the most worked plan and have made the most efforts to ensure access to rig time between now and early 2009. The table below provides the list of operators that have already contracted the most competitive jackup rigs days for the next two years (includes firm contracts, options, and LOIs).

Leading Operators with the Most Competitive Jackup Days Contracted
For the Two Years from February 2007 to February 2009
Based on Contracts Announced as of February 22, 2007
Operator Jackups Days Contracted Avg Day Rate Total Day Rates
To be Paid
Pemex 29 rigs 14,187 days $115,372.97 $1,879 million
Saudi Aramco 22 rigs 13,665 days $110,480.00 $1,661 million
ONGC 18 rigs 10,124 days $95,538.33 $1,074 million
Chevron 19 rigs 7,591 days $123,340.00 $1,056 million
Total 11 rigs 6,603 days $148,902.78 $1,035 million
Maersk Oil 12 rigs 6,167 days $147,384.62 $911 million
Shell 13 rigs 5,632 days $99,523.81 $627 million
BP 8 rigs 4,678 days $174,684.21 $851 million
Petrobel 11 rigs 4,229 days $131,875.00 $565 million
Rasgas 8 rigs 3,938 days $68,076.92 $261 million
ExxonMobil 6 rigs 3,186 days $166,625.00 $581 million

Looking at these upcoming contracts, it is easy to see the Pemex will still continue to be the world's leading operator of jackups. Most of the other companies on the list will remain mostly inline with their levels of activity of the course of 2006. However, the most notable company on the list is Saudi Aramco, which is raising its level of jackup days contracted by about 25% from the level of 2006.

For More Information on the Offshore Rig Fleet:
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