Demand for floating rigs grows again in 2018

June 5, 2018

Global demand for floating rigs is expected to rebound in 2018 after three consecutive years of decline, predicts McKinsey Energy Insights.

According to a study by the consultancy, about 140 rigs will be needed this year, with South America, Europe and North America concentrating the activities.

The annual growth of 3% tends to remain at least until 2020, when unconventional oil production (Light Tight Oil) reaches its plateau, jumping to 6% a.a. after that.

It is expected that the rate of use of floating units will be 70% this year, falling to 66% in 2019, still reflecting the oversupply of equipment in the industry. Only in the second half of the next decade will the levels of 2014 be seen again.

McKinsey notes, however, that the volume of floating rigs demanded will be affected if OPEC countries resume production again.

Optimism

The prospect of resumption of exploration activity growth was highlighted by several rig operators at conferences with analysts on first quarter financial results.

“In different basins we see oil companies hiring ultra-deepwater assets for the first time in two years,” said Transocean CEO Jeremy Thigpen.

For Ensco’s Jeremy Thigpen, the increase in the price of the barrel, coupled with the retirement of rigs that are currently in operation, will give new impetus to the market. “These factors have created a favorable scenario for offshore rigs,” he said.

Competition

Ocean Rig CEO Pankaj Khann believes that 2018 will still be a difficult year, with part of its rigs going through periods of idleness after the termination of contracts.

The executive is, on the other hand, optimistic about the Brazilian market, where Petrobras and private oil companies already create new hiring opportunities.

“Looking at global demand, we see 60 years of rigss being procured from bids and RFIs (Request For Information) that are on the market,” he noted.

Source: Brazil Energy

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