Weekly Offshore Rig Review: Engaging Aging

This week's offshore rig review takes a look at the age of the offshore rig fleet from several different angles. However, primarily, we will be examining which offshore drilling contractors have the oldest and youngest fleets, including breaking that down by rig types.

We'll start by taking a look at the age of the fleet by rig type, which is outlined in the table below. Not surprisingly, jackups constitute the oldest portion of the active offshore rig fleet while drillships are the youngest rig type. This clearly reflects the growth of the industry from shallow-water drilling to ever-increasing depths over the years.

Fleet Age by Rig Type
As of August 9, 2007
  Competitive   Non-Competitive
Rig Type Rigs Age   Rigs Age
Jackups 355 rigs 23 years   52 rigs 25 years
Semisubs 156 rigs 23 years   12 rigs 20 years
Drillships 35 rigs 19 years   3 rigs 17 years

A quick look at the oldest competitive rigs also serves to highlight the fact that jackups tend to be some of the oldest rigs in the fleet. In the list of the 6 oldest competitive offshore rigs shown below, 5 out of 6 rigs are jackups.

Oldest Rigs in the Fleet
Competitive Rigs Only
As of August 9, 2007
Manager Rig Name Rig Type Yr Built Age
Schahin Cury North Star I Jackup 1965 42 years
GlobalSantaFe GSF Britannia Jackup 1968 39 years
Viking Offshore (USA) Viking Producer Semisub 1969 38 years
Transocean Inc. Transocean Mercury Jackup 1969 38 years
Well Services Marine 50 Jackup 1969 38 years
Blake Offshore Blake 202 Jackup 1969 38 years

While these overall numbers are somewhat informative, a more interesting topic is the average age of the fleets of each major offshore drilling contractor. In particular, for this analysis, we were interested in seeing how the fleets of Transocean and GlobalSantaFe stacked up to other rig managers in terms of rig ages, given the pending merger of these two leading rig fleets.

The table below lists the rig managers with at least 10 competitive, offshore drilling rigs according to fleet age, with the oldest fleet being ranked first. As can be seen, Diamond sits at the top of the list with a fleet that has an average age of 28 years. At the opposite end of the list is Seadrill with 22 rigs averaging 13 years in age. Both Transocean and GlobalSantaFe rank in the bottom half of the list, meaning that their rigs are slightly newer than average.

Oldest Rig Fleets by Manager
All Rig Types, Competitive Rigs Only
As of August 9, 2007
Rank Manager Rigs Avg. Age
1 Diamond 44 rigs 28 years
2 Nabors 10 rigs 27 years
3 Hercules 31 rigs 27 years
4 Noble 58 rigs 25 years
5 National Drilling 11 rigs 24 years
6 COSL 15 rigs 24 years
7 Pride 45 rigs 24 years
8 Transocean 77 rigs 23 years
9 Saipem 10 rigs 22 years
10 GlobalSantaFe 56 rigs 21 years
11 ENSCO 45 rigs 20 years
12 Rowan 21 rigs 19 years
13 Maersk 17 rigs 15 years
14 Seadrill 22 rigs 13 years

Now let us examine the fleet of jackup rigs specifically. The list below outlines the 10 largest fleets of competitive jackup rigs according to manager. Among these largest jackup managers, Rowan has the youngest fleet with an average age of 19 years, while Diamond has the oldest fleet of jackups averaging 29 years in age.

As for Transocean and GlobalSantaFe, GSF has the third-youngest jackup fleet (average age 23 years), while Transocean is tied for the second-oldest jackup fleet (average age 27 years). GSF's average rig age of 23 years places it in the top three of large jackup managers. However, that is only on par with the average age for competitive jackups. So, neither GSF nor Transocean stand out in terms of the age of their jackup fleets.

Jackup Fleet Age By Manager
Competitive Rigs Only
As of August 9, 2007
Manager Jackups Avg. Age
ENSCO 43 rigs 21 years
GlobalSantaFe 42 rigs 23 years
Noble 41 rigs 26 years
Pride Intl 28 rigs 27 years
Hercules 28 rigs 27 years
Transocean 24 rigs 27 years
Rowan 21 rigs 19 years
Diamond 13 rigs 29 years
COSL 12 rigs 24 years
National Drilling 11 rigs 24 years
Top 10 Combined 263 rigs 24 years
All Others 92 rigs 20 years
Total 355 rigs 23 years

The second-largest segment of the offshore drilling rig fleet is the group of semisubmersible rigs, which we'll examine now. In the table below are shown the fleet size and average age of the 10 largest competitive semisub fleets. Diamond and Dolphin A/S are tied for the oldest average semisub fleet age, with rigs averaging 28 years in age (5 years above average). Meanwhile, Noble has the youngest semisub fleet, with an average age of 17 years (6 years below average).

Again looking at Transocean and GlobalSantaFe, their two semisub fleets are both younger than average, ranking as the 4th and 5th youngest semisub fleets. So, in terms of semisubs, the fleets of GSF and Transocean are 4 years and 1 year younger than average, respectively. Their combined semisub fleet would average 21 years in age, which is 2 years younger than the overall average, but would still leave the combined fleet as the 4th youngest among large competitive managers.

Semisub Fleet Age By Manager
Competitive Rigs Only
As of August 9, 2007
Manager Semisubs Avg. Age
Transocean 41 rigs 22 years
Diamond 30 rigs 28 years
Pride Intl 12 rigs 18 years
GlobalSantaFe 11 rigs 19 years
Noble 11 rigs 17 years
Dolphin A/S 8 rigs 28 years
Saipem 5 rigs 22 years
Stena 5 rigs 18 years
Atwood 4 rigs 26 years
Odfjell 3 rigs 27 years
Top 10 Combined 130 rigs 23 years
All Others 25 rigs 24 years
Total 155 rigs 23 years

Lastly, we will look at the average age of the drillship fleet. This is the youngest and smallest group of rigs being examined here. It also shows the widest variance in terms of average fleet ages among the 5 largest fleets, which are shown below. At the one end of the spectrum lie Frontier, Aban Loyd, and Noble with fleets averaging 31 years, 30 years, and 27 years old, respectively. In the middle lies Transocean with a fleet of drillships averaging just 15 years old. At the opposite end lies GSF with a very young fleet of drillships that average just 7 years old.

In this particular area, Transocean and GlobalSantaFe truly do stand out from the rest of the fleet. Both of their fleets are significantly younger than the average for drillships, and their combined fleet would have any average age of 13 years, which is 6 years below the overall average. When you take the Transocean and GSF drillships out of the average and just look at the rest of the fleet, the average age for those drillships jumps up to 23 years. So, the combined Transocean/GSF drillship fleet would be an average of 10 years younger than the rest of the competitive drillships in the world.

Drillship Fleet Age By Manager
Competitive Rigs Only
As of August 9, 2007
Manager Drillships Avg. Age
Transocean 12 rigs 15 years
Frontier 3 rigs 30 years
GlobalSantaFe 3 rigs 7 years
Noble 3 rigs 27 years
Aban Loyd 2 rigs 31 years
Top 5 Combined 23 rigs 19 years
All Others 12 rigs 19 years
Total 35 rigs 19 years

Looking Forward
Much has been said of the large number of newbuild rigs that will be joining the offshore rig fleet over the next 3 to 4 years. The jackup fleet is set to increase by 70 rigs (20% increase). This influx of jackups will help to bring the average age of the jackup fleet down to 22 years (where it would have stood at 26 years without the new rigs). The semisub fleet is set to grow by 43 rigs (28% increase), which will help to bring the average age of semisubs down to 21 years (where it would have been 26 years). The drillship fleet is set to grow most remarkably by adding 17 rigs (49% increase), which will bring the average drillship age down to 15 years (where it would have been 22 years).

Those new average ages assume that no rigs will be retired over the course of the next three years. However, if rigs are retired, they will most likely be among the the older rigs, which would help to bring average rig ages down even further.

Looking at future rig ages for Tranocean and GlobalSantaFe, their fleets of jackups and semisubs will continue to age, and their average ages will continue to push higher. With GSF having only one newbuild semisub (GSF Development Driller III), there will be little new blood to hold the average age of these segments down. However, Transocean has 4 newbuild drillships that are set to be delivered in 2009 and 2010, which will continue to keep Transocean in the lead with the largest and one of the youngest drillship fleets in the world.

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