Offshore newbuild rig count drops for 2012

Jan 17, 2012 12:00 AM

Offshore rig demand is projected to be in the high 60th percentile for the second straight year. Nevertheless, new rigs will hit the market this year to meet the demand for oil and gas exploration and production.
Rig orders predominantly placed from 2008 through 2010 are ready for delivery over the next 12 months. For all of 2012, there are 35 rigs ready for delivery, down 35 % from 2011 and only 13 rigs are contracted at this time. Of the 35 newbuilds, 20 are jackups, 8 are drillships and 7 are semisubmersibles.

Looking at quarterly deliveries, first quarter 2012 starts strong as 9 rigs are due to hit the market, followed by 8 rigs in the second quarter, dropping to 6 rigs in the third quarter and ramping up again with 12 rigs in the fourth quarter, provided that all rigs are delivered as scheduled.
It is worth noting, however, that due to likely delays in the construction process for some rigs and financing difficulties for some of the marginal owners/shipyards constructing rigs, not all of the rigs currently scheduled to hit the water this year will actually do so.

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Rig managers
25 rig managers are expecting new-build rigs this year, compared to 32 last year. Atwood Oceanics is expecting 3 newbuilds this year, 2 jackups and 1 semisubmersible.
The Atwood Condor (UDW semi-submarine) is at the Jurong shipyard in Singapore. The shipyard started construction in July 2008 and expects to be finished in June. When released for service, the semisubmersible will be capable of drilling down to 40,000 feet in up to 10,000 feet of water. Hess Corp. has contracted the Atwood Condor at a dayrate in the mid $ 510s through June 2014.

The jackup Atwood Mako (400' ILC) is at the PPL Shipyard in Singapore. The shipyard started construction on this rig in October 2010 and expects to be finished in September.
The independent leg cantilever jackup will be capable of drilling down to 30,000 feet in 400 feet of water. It currently has no contract. Identical sister rig, Atwood Manta (400' ILC), is also at the PPL Shipyard, where construction began in October 2010. The rig will be ready for service in December.

Atwood Oceanics also has 2 rigs due to hit the market in 2013 and 1 scheduled for 2014. ENSCO, Essar Oilfield Services, M/S Drilling, National Drilling, Prospector Offshore, Queiroz Galvao Oleo e Gas, Seadrill and Vantage all expect to welcome 2 rigs to their fleets this year. ENSCO has 2 semisubmersibles joining its fleet in March and September respectively. Both are under construction at the Keppel Shipyard in Singapore.
The ENSCO 8505 (UDW semi-submarine) is under a rig sharing contract between Anadarko, Apache and Noble from June 2012 through October 2013 at a dayrate in the mid-$ 470s. However, sister rig ENSCO 8506 (UDW semi-submarine) is not yet contracted when it leaves the shipyard in September.

Neither Essar Oilfield Services jackups, which are under construction in the ABG Shipyard in India, are contracted at this time. The rigs are scheduled to be completed at the end of November. M/S Drilling jackups 1 and 2 are also being constructed at the ABG Shipyard in India.
The first jackup is due to be completed in April and the second is scheduled to leave the shipyard in October. Neither jackup is contracted at this time.

Likewise National Drilling's 2 unnamed jackups currently do not have a contract in place when released from the United Arab Emirates (UAE) Lamprell Shipyard, Hamriyah in April and August, respectively.
Prospector Offshore currently has 6 jackups under construction; 2 will be completed in 2012. The Dalian Shipyard in China will complete both independent leg cantilever jackups in July. Neither has a contract yet.

However, Queiroz Galvao Oleo e Gas has two drillships due to leave the shipyard this year and both have contracts in place. The Amaralina Star (UDW drillship) is at the Samsung yard in South Korea through May. When it leaves the shipyard the rig will drill off Brazil for Petrobras through August at a dayrate in the low $ 380s.
Petrobras also has contracted the Laguna Star (UDW drillship) at a dayrate in the low $ 380s. The rig will leave the Samsung yard in China in mid-August and fulfil its contract off Brazil through October.

Neither newbuild Seadrill jackup, due out of their respective yards in December, has a contract yet. The jackup West Telesto (400' ILC) is at the Dalian shipyard in China, and the West Tucana jackup is at the Jurong shipyard in Singapore.
Vantage Drilling has 2 drillships due to enter the market this year. The Dalian Developer (UDW drillship) is at the Cosco shipyard. When complete in June, the MPF 10000 drillship will be capable of drilling down to 35,000 feet in 10,000 feet of water. The Cobalt Explorer (UDW drillship) is at the Daewoo shipyard in South Korea until December. The DSME Ultra Deepwater Drillship will be capable of drilling down to 40,000 feet in 12,000 feet of water.

Shipyards
15 shipyards are scheduled to deliver new rigs in 2012, compared to 19 last year. Far East Asia has 15 rigs under construction, the most of all the regions. Southeast Asia closely follows with 11 rigs under construction.
South Asia and the Middle East each have four under construction and South America has one.

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Keppel Shipyard in Southeast Asia will release 5 rigs from its yard in 2012, the most of any shipyard. It will complete 3 jackups and 2 semisubmersibles. Three shipyards plan to release 4 rigs each.
The Samsung yard in Far East Asia is scheduled to complete four drillships, ABG yard in South Asia and Lamprell in the Persian Gulf will wrap up four jackups each. The Samsung yard in Far East Asia is constructing the Stena DrillMax ICE (UDW drillship) for about $ 1.15 bn, which is the highest construction cost of any rig due to be delivered this year.

The rig was originally due out of the yard in 2011, but was delayed. The drillship, which is not yet contracted, is designed for harsh environments and ice infested waters and is capable of drilling in up to 10,000 feet of water and drill down 35,000 feet.
If we look at the average cost by rig type for the units delivering in 2012, drillships average about $ 770 mm, semisubmersibles average $ 535 mm and jackups average $ 195 mm. The Far East will benefit most from rig construction in 2012.

The region will haul in an average of $ 550 mm per rig, and with 15 rigs due to be delivered this year, that's a nice boost to its economy. Coming in a distant second, the Southeast Asia will see about $ 320 mm per rig.
Looking at construction time, the average for all rigs is about 3.3 years, but drillships take the longest average time to construct, 4.2 years. Semisubmersibles take about 4 years to complete and jackups take about 2.7 years from start to finish.

Coming right up
Two newbuilds are due out of the yard in January. Etesco's Takatsugu (UDW drillship) is rated to 10,000 feet of water. Petrobras has contracted the rig through April 2022 at a dayrate in the high $ 430s.
Petrobras’s jackup P-59 (350' ILC) is rated for 350 feet of water and will be capable of drilling down to 30,000 feet when it leaves the Sao Roque do Paraguacu shipyard in January. Petrobras plans to employ the rig through January 2020.

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