There’s still over 50 newbuild jackups stranded in Chinese shipyards. It’s the end of 2018, and nobody knows when or how many of those rigs are coming to the market.
Everyone knows China’s got an issue with the amount of capital the shipyards tied up during the jackup newbuilding boom that started over eight years ago. Speculators, ready to make millions off asset flipping (and a few established drilling contractors like Seadrill), signed construction contracts with Chinese shipyards left and right – some of which required astonishingly low amounts of equity.
Now, Chinese yards are left trying to navigate in the wake that the jackup ordering frenzy created for them. They’ve still got over 50 of them sitting around at China Merchants, SWS, DSIC, CIMC, COSCO, and other yards throughout the country.