Oil and gas leaders are optimistic about the future demand for semi-submersible platforms, but, according to the IHS Markit analysis, growth should be moderate as the market is far from reaching full use of these vessels. According to the agency’s Floating Rig Report and the Petrodata RigPoint database, only 48% of the floaters are currently under contract.
“Even with annual growth expected to be 7% by 2022 and with daily rates increasing (by about 25% compared to the third quarter of this year with the same period in 2017), we are still far from a boom,” he said. Erik Simonsen, director of IHS Markit’s upstream consulting business.
According to the consultant, there are two key points for the expected boom not to happen: the excess offerings of these platforms in the market and the higher daily usage and fees in the modern floaters. The demand for more modern floaters is due to the efficiency technologies that are present in these vessels.
Simonsen’s forecast is for the industry to continue with the utilization rate of floating systems below 70% by 2022. For the market to come into equilibrium, about 25 platforms will have to be discarded each year by 2020.
Floaters will push offshore market growth
Still, according to the IHS database, the offshore market will recover, but slowly. Demand for jack-ups and buoys is expected to be 15% by 2020, boosted by higher barrel prices and lower E & P costs.
For operators, the challenge will be to not spend all the free cash flow in field development. “Oil companies should not repeat their mistakes of the past. The excess cash flow should be used to pay off debt and dividends, or for acquisitions. So the market recovers, “says the consultant.
Source: Brasil Energia