RIG DEMAND OFF NORTHWEST EUROPE LARGELY DIM
Demand for semisubmersible drilling rigs off Northwest Europe will fall again this year, although demand for jack ups will partially recover.
Day rates will continue at the low levels of 1992. While rig demand will increase significantly in 1994, this will hardly affect day rates because of the large number of available rigs.
Only the high specification rigs required mainly off Norway are likely to see improved day rates, says a 1993 drilling forecast by Wood Mackenzie Consultants Ltd., Edinburgh.
Here are some of the findings of a survey of operators' drilling plans:
- North Sea semisubmersible rig demand will fall 7% from the 1992 level to about 41 rig-years for 1993.
- North Sea jack up rig demand will rise 8% from the 1992 level to about 39 rig-years in 1993.
- Demand for semisumbersibles off Norway will remain steady at about 13 rig-years.
- U.K. demand for semisubmersibles will fall from 44 rig-years last year to 41 in 1993, while jack up demand will increase from 36 rig-years to 39.
Wood Mackenzie attributes the reduced need for semis to decreased development drilling off the U.K. and reduced exploration and appraisal drilling off Norway.
Effective utilization rates for semisubmersibles may increase, however, due to the number of rigs recently cold stacked.
DAY RATES
Day rates for second generation semisubmersibles remained at about $30,000 during 1992. Third and fourth generation rig day rates fell from $75,000 in the first quarter to $60,000 by yearend.
Low specification jack ups peaked at $35,000/day but started and ended last year at $25,000/day. Heavy duty rig rates fell from $50,000/day in the first half to about $40,000 at yearend.
The North Sea semisubmersible fleet fell from 66 rigs at the beginning of 1992 to 54 at yearend. Ten were cold stacked, three left the North Sea, and one unit moved in from the Gulf of Mexico.
The jack up fleet started 1992 with 46 units and ended with 44. Two high specification units moved in, while three other jack ups left the area. The market for jack ups is oversupplied, Wood Mackenzie said.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.