Transocean Delays Jackups, Offshore Rig Count Down

Rig operator Transocean announced Tuesday that it is delaying delivery of five high-specification jackups from Keppel Offshore & Marine.

The class Super B 400 jackup rigs, worth a combined $1.1 billion, were slated for delivery starting the first quarter of this year, but will be pushed back until 2020.

Transocean is a repeat customer at Keppel; it already owns several Super B class jackups. 

The announcement is the latest in a string of deferred deliveries, and notably longer than delays recently negotiated by other companies – for example, Ocean Rig's 18-month delay for one, Seadrill's two years' delay for 10, and an unnamed buyer's three years' delay for two at DSME. Legal consultants are reportedly gearing up for protracted disputes over contract cancellations and delays at rig-building shipyards.

Transocean released its full year 2015 and Q4 2015 results February 25, posting net income of $800 million for the full year after writedowns of $1.7 billion on its semisubmersible fleet. The profit was a major improvement on Transocean's $1.9 billion loss for FY 2014. It also announced income of $600 million on revenues of $1.9 billion in the fourth quarter.

The firm reported a total of 27 rigs stacked or idle as of its latest February 11 fleet status report. Since the beginning of the downturn, it has scrapped 24 rigs, the company says, and it has suggested that it has 10 to 15 more that could go to the shipbreakers.

Separately, the February edition of the benchmark Baker Hughes worldwide offshore rig count was released Monday. Active rigs dropped to 225, down 17 from January and down by a third from the same period in 2015. The combined land and shore count was down 130 rigs from January, down by about 40 percent from early 2015, and down by more than half from late 2013. Riglogix estimated global fleet utilization at under 60 percent in January, and operator Seadrill reports that firms are accepting “survival” day rates of less than $200,000, less than a third of peak values several years ago.