Drillships Starting to Enter Market Without Contracts

Published Oct 17, 2014 6:33 PM by The Maritime Executive

Offshore drilling companies face new market worries, says Barron’s news agency. Companies such as Seadrill and Ensco could now be concerned about the number of newbuild drillships entering the market.

According to Credit Suisse analysts Gregory Lewis and Neesha Khanna, Maersk’s new drillship Maersk Venturer is the first such unit to have left the shipyard without a contract, although expectations are that it will get some short-term work in Asia with Total.

While this was the first newbuild drillship to leave a shipyard without its maiden contract inked, it will not be the last, say the analysts, who expect that another two or three newbuilds to follow. Amongst them could be Maersk Voyager, Pacific Meltham and West Carina.

The analysts expect 2015 to be tough with around 12 newbuilds scheduled for delivery without contracts. However, the market is not without hope with some tenders confirmed including for Stampede in the Gulf of Mexico and the Libra field offshore Brazil which are scheduled to start late 2015 or early 2016.

The number of active drillships in the offshore drilling fleet has more than doubled over the past decade, from 37 units in 2003 to 87 units in 2013. Rigzone statistics as at September 2014 indicate that drillship utilization is 88.7 percent (94 out of 106 units).