Global offshore jack-up drilling activity slipped, but floater activity remained steady, even showing a positive gain in West Africa during week 33 2020
Globally there are 320 offshore jack-ups actively drilling, down two week-on-week, while semi-submersibles, drill ships and MODUs held at 101 units. Westwood Global Energy’s RigLogix reported as of 10 August, floaters in West Africa rose from five to six units. It was the first time the number of contracted floaters rose in West Africa in two months. Following last week’s Rigs report, which indicated increased offshore drilling activity for the first time in a month and a half, the market may be stabilising.
The price of Brent crude oil closed at US$44.95 on 10 August, a 30% increase from 10 days earlier, when it closed at US$34.49 on 31 July.
Perhaps the biggest news in the offshore drilling market was Noble Corporation’s filing of voluntary relief under the Chapter 11 bankruptcy code. Under its restructuring support agreement, London-based Noble is aiming to eliminate its US$3.4Bn bond debt. The debt would be swapped for new equity in a reorganised company.
In speaking about the current outlook for offshore drilling, Noble president and chief executive Robert Eifler voiced the concerns of many in the offshore oil and gas sector.
“Our industry is dealing with the most difficult environment we have endured in decades,” said Mr Eifler. “After several years of low commodity prices that translated to severe reductions in overall rig demand and day rates, the impact of the Covid-19 pandemic and the OPEC+ supply disruptions has led us to push out further our expectations for a meaningful recovery in demand.”
In reporting its Q2 2020 results, Noble said contract drilling services revenues were US$220M compared to US$267M in Q1 2020. The decrease in revenues was due largely to a decline in total fleet operating days as a result of four rigs completing contracts in late Q1 or early Q2 and fewer available days in the second quarter due to the retirement of Noble Joe Beall. As a result, Noble reported its fleet utilisation was 59% in Q2, down from 77% in Q1.
Four of Noble’s high-specification ultra-deepwater drill ships have now been contracted by ExxonMobil to drill in offshore Guyana. In early August, ExxonMobil awarded the drillship Noble Sam Croft a new six-month contract to drill offshore Guyana, with operations commencing in Q4 2020 after the rig finishes its current programme offshore Suriname.
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