Dogging The | Rig Deliveries Outpace Demand, New Orders Fall
July 24, 2010 – 1:19 am
Thomas E. Marsh ODS-Petrodata
New mobile offshore drilling rigs are being delivered into a market ill-suited at present to absorb new capacity, and some rigs are being delivered with no work prospects in hand. In conjunction, new rig orders have fallen dramatically over the past year, according to data compiled
In January 2006, the global offshore drilling fleet included 590 mobile rigs, and deliveries in the most recent new rig construction cycle were beginning in earnest. The fleet increased in size more or less steadily as shown in Figure 1 and as of May 2010, 703 mobile offshore drilling rigs were in existence, representing a 19% increase in the fleet size. The increase in fleet size will continue, as 126 new offshore rigs are still under construction, most for delivery
The soft demand situation in the global rig market as a whole is creating problems for owners of some new rigs. Of the 63 new mobile offshore drilling units delivered since January 2009, 17 entered the fleet without their owners having firm contract commitments in hand. All 17 have since landed contract commitments, although not all are actually working yet.
More uncommitted supply overhangs the market. Of the 126 offshore rigs that are under construction, 67 do not have firm contract commitments as of May 2010. These include 39 jackups, 12 semisubmersibles, 15 drillships, and one drilling tender.
As had been expected, the number and value of new rig orders fell dramatically in 2009 compared to the four preceding years when the new rig construction boom was in full swing (Figures 2 and 3). In 2008, 57 offshore drilling rigs were ordered at an estimated cost of $26.2 billion. In 2009, 18 rigs were ordered at an estimated cost of $4.1 billion.
New offshore rig orders to date in 2010 are running at a slower pace than 2009, with only two ordered as of May at an estimated cost of $837 million. One of these units, a semisubmersible, is being built at an estimated cost of $700 million, accounting for the bulk
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