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Rigs report: jack-up rig market sky high on Middle East investment
Jack-up drill-rig demand is set to climb in the Middle East due to ambitious plans by state energy companies to increase offshore capital expenditure
Utilisation for jack-up drilling rigs and service vessels in the region are already high and charter rates are climbing, Riviera Maritime Media’s OSJ Middle East Conference heard.
Plans by Saudi Aramco, Abu Dhabi National Oil Corp and Qatar Energy to develop more offshore fields and increase drilling activity will generate higher demand and a need to build new drilling rigs, according to an expert panel.
Gulf Marine Services commercial director Jamie Taylor highlighted the many positive trends and dynamics that are currently helping drive growth in the regional jack-up sector for drilling contractors and vessel owners.
He said utilisation was already exceeding 90% for the 94 jack-ups now working in the region. He then outlined development plans and future projects for ADNOC, Aramco and Qatar Energy set to be implemented that will span many years.
Shelf Drilling director Rahul Mehrotra analysed the regional outlook for the jack-up rig market, which currently stands around 94%, driven by rising investment in oil and gas drilling, developments and exploration.
Outside of the Middle East, though, jack-up rig counts are falling as international energy companies focus more on deepwater projects and less on those in shallow waters.
Mr Mehrotra said he believes that demand will pick up again in 2024 as other energy companies will look to ramp up capacity.
He said he thinks potential jack-up demand could find growth in various markets including India, Africa and the North Sea, due to emerging carbon capture projects.
Energy companies have evolving capability needs with some requiring high-spec jack-up rigs to conduct drilling in water depths that are close to the top-end of their capabilities, or to jack-ups suited for marginal field developments. This complexity creates opportunities, said Mr Mehrotra.
On the technology side, Jacking Solutions International managing director Franck Jaussaud presented some of the innovations boosting the reliability of jack-up rigs and self-propelled vessels.
He presented a case study in which a vessel rebuild was deferred and uptime on an existing unit was extended thanks to comprehensive leg shimming, guide adjustment and upgrade investments.
With advanced modelling now allowing detailed wear mapping over time, Mr Jaussaud said he believes that smarter leg assessments and procedural upgrades can significantly extend jack-up working life and reduce failure risks.
In rig contract news, offshore drilling company Transocean won a US$251M contract for its harsh environment semisubmersible Transocean Barents.
The rig’s duration of employment is a minimum 540-day contract with OMV Petrom in the Romanian Black Sea at a rate of US$465,000 per day, excluding additional services. The rig’s work programme is expected to commence Q1 2025 and is estimated to contribute approximately US$251M in backlog, excluding full compensation for a mobilisation and a demobilisation fee, Transocean said. For each day over 540 days, including the two option periods, the operating day rate will be US$480,000.
Shelf Drilling won a contract for its jack-up rig Perseverance in Vietnam. The company said the contract, in total, comes to approximately US$73M.
The rig will shortly commence mobilisation to southeast Asia, and the planned start-up of operations with PetroVietnam Domestic Exploration Production Operating Company in Vietnam is Q3 2024. The firm term of the contract is approximately 16 months, according to Shelf.
And in the US Gulf of Mexico, Shell has green-lit a three-well, phased campaign to boost production at its Perdido spar, approximately 322 km south of Galveston, Texas, located at a water depth of approximately 2,400 m. Taking a final investment decision on the drilling campaign, which is expected to complete Q2 2025, Shell said the new wells are expected to produce up to 22,000 barrels of oil equivalent per day.
And in Nigeria, Dolphin Drilling said it had terminated a contract with Peak Petroleum for its Blackford Dolphin semi-submersible drilling rig due to an alleged breach of contract.
Additional reporting: Edwin Lampert
Global drilling rig and OSV markets will be analysed in depth at Riviera Maritime Media’s Offshore Support Journal Conference, Awards and Exhibition 2024, set to be held in London, 7-8 February 2024, click here to purchase tickets and attend this industry-leading event and meet top executives from the world’s largest OSV owners
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