London, 21 December 2023, (Oilandgaspress): – The latest offshore market update, released by Clarksons Research onto its Offshore Intelligence Network platform today, profiles a post 2014 high for “floater*” utilisation. Discussing the development, Steve Gordon, Managing Director of Clarksons Research, commented:
• Global floater drilling rig utilisation reached 90% (2000-2023 time series available on request) in early December, the first time it has reached 90% since 2014 as rig market strength continues.
• Floater utilisation is up 25pp since 2020 supported by a recovery in global drilling demand in recent years and underlying rig supply-side attrition post-2014.
• Energy price environment and energy security focus promoting renewed interest in deepwater offshore oil & gas developments.
• Active offshore floating drilling rig count rose to 143 units as of early December, up 38 rigs (+36%) since a low-point of 105 in 2020 (2014 peak of 289).
• Supply-side re-balancing over the past decade has also tightened floater markets, with marketable floater supply falling to 161 units as of December 2023, down 47% since 2015 due to removal / recycling of rigs in previous downturn (173 floaters were removed from the fleet across 2014-21).
• Today, the world’s largest drillers in the floater market include Transocean (36 units), Noble Corp (19) and Valaris (16), while Petrobras (22 units), CNOOC (12) and Shell (11) are currently the top floater operators.
• Utilisation has firmed especially sharply in the drillship sector, where global utilisation rose to 93% by start-December, 16pp above the 10-year average. Drillship utilisation has been supported by strong Ultra Deep Water (UDW) demand in the ‘Golden Triangle’ of US Gulf, West Africa and Brazil, where the number of active units increased to 72 as of start-December, up 32% on the 5-year average.
• The sustained gains in demand and utilisation continue to exert strong upward pressure on floater rates; ‘leading edge’ floater dayrate awards have surpassed the $500,000/day mark in Q4-23, while our overall Floater Rate Index has more than doubled since start-21 to stand at 130 points (2021: 54, 2013: 153).
• Our projections suggest rig demand will grow 11% in 2024 (building on gains of 14% in 2022 and ~8% in 2023), amidst elevated levels of tendering activity in the ‘Golden Triangle’ and stronger demand for harsh environment semi-subs (driven by firm activity in West Africa, Australia and the Mediterranean). Meanwhile, floater supply-side capacity is only expected to increase only gradually given the limited newbuild orderbook and the increasing cost / time intensity of reactivating long-term cold-stacked units.
• Overall, we currently project global floater utilisation to reach 92% by end-24 and 96% by end-25.
• Offshore oil and gas production continues to account for 16 per cent of global energy supply including 25.5m bpd of oil and 129bn cfd of gas.
*floaters include Drillships and Semi-Submersible Drilling Rigs that typically operate in deep, or ultra deep, water environments.
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