8 mobile offshore rigs come off drilling contracts in Gulf of Mexico

Demand for US mobile offshore rigs in the Gulf of Mexico fell hard this week, with eight rigs net coming off contracts and a decrease of one unit in the fleet size.

By OGJ editors

HOUSTON, Aug. 16 -- Demand for US mobile offshore rigs in the Gulf of Mexico fell hard this week, with eight rigs net coming off contracts and a decrease of one unit in the fleet size, officials at ODS-Petrodata Group, Houston, reported Friday.

"This week's count marks the steepest US gulf week-to-week decline in 12 months," officials said. Utilization among offshore rigs in those waters dropped 3.7 points to 65%, with 128 units contracted out of the 197 available for work.

"The reason for that drop is unclear at the moment," said Tom Marsh, who tracks offshore rig operations at ODS-Petrodata. "There is a fairly large number of contracts coming to an end over the next few weeks. Some will be rolled over, but we could see additional declines." He said, "I think we'll be lucky if we're able to stay in the current range."

Marsh said an increase of 10 mobile offshore rigs under contracts "in the last 4-5 weeks, when we also had several rigs leave the area, may have made us feel better than we should" about rig utilization in the gulf. However, he said, "We should know more in the next 3-4 weeks about what the offshore operators have in mind for the rest of this year."

Total US drilling activity was down by 1 rotary rig, with 853 units still working this week, said officials at Baker Hughes Inc. During the same period last year, there were 1,242 rotary rigs drilling in the US and its waters.

The numbers of offshore rigs actually in the process of drilling were down 1 to 109 in the Gulf of Mexico, and down 2 to 112 for the US as a whole, said Baker Hughes officials. Drilling operations in inland waters were down 3 units to 16. However, there were 725 US land rigs drilling this week, 4 more than the previous week.

Canada's rig count rebounded by 28 to 219, after a loss of 66 units the previous week. A year ago at this time, there were 348 rotary rigs drilling in Canada.

The number of US rigs drilling for natural gas was down 8 to 718 this week, but those drilling for oil increased by 6 to 133. Two rigs were unclassified. Directional drilling in the US decreased by 3 rigs to 229, but horizontal drilling was up 2 to 57.

Louisiana led this week's decline, down 7 rotary rigs with 164 still drilling. Wyoming and Alaska were down 2 rigs each to 41 and 8, respectively. New Mexico had 42 rotary rigs working, 1 less than the previous week.

Partially countering those declines, Texas' rig count was up 4 to 343 units this week. Oklahoma had 106 rotary rigs working, 3 more than last week; and California's rig count increased by 1 to 20.

In European waters, the number of rigs under contract and the total drilling fleet each increased by 1 mobile offshore rig to 87 and 104, respectively. That pushed utilization to 83.7% in those waters.

Worldwide, however, the number of mobile offshore rigs under contract was down by 8 to 529 while the total available fleet increased by 1 to 658, with total utilization down 1.3 points to 80.4%.

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