A perspective on offshore drilling: five key stats the provides encouragement for the future
2. 80% DECLINE IN SHARE PRICES
We know that rig owners have struggled with the oil price downturn, with their share prices declining by as much as 80% over the last 18 months. While overheads are being slashed, old assets have been retired earlier than anticipated, and in the worst case scenario, operators are going bankrupt to restructure debt. This has, in turn, meant that contractual work with suppliers has also been squeezed – some of the supply chain offering discounts to operators of up to 50%.
3. 200 ADDITIONAL FLOATING RIGS REQUIRED
The astonishing demand for floater rigs will continue to rise, with an additional 200 required in the next nine years by operators. A strategic move away from fixed and jack-up rigs, the floater rig, offers operators flexibility and multi-use across sites – making significant savings on infrastructure. With a 5% increase per annum in floater rigs until 2025, these new mechanisms are sure to become the focal point for new drilling projects around the world.
4. ~1% GROWTH FOR JACK-UP RIGS
There’s still a market for jack-up rigs, despite a low growth forecast compared to floater rigs. From 2017 to 2025, insights from McKinsey has forecasted that there will be close to a 1% growth year on year in jack-up demand. With 120 new jack-up rigs required in this timeframe, the OFSE industry needs to be ready to deliver these, and with a higher attrition rate than previous, to appease a more demanding client base that is focussed more than ever on sustainability and ROI.
5. 50% OF ASSETS ARE OVER 30 YEARS OLD
It is anticipated by McKinsey Energy Insights that 50% of production platforms are 30 years old or over. The combination of expensive day rates and their subsequent decommissioning have made old assets a burden for rig owners – but a necessity to keep production going. Thankfully, with the demand for new jack-ups and floaters, operators can look to dispose of these old assets sooner, helping to stimulate the decommissioning market at the same time.
AWAITING THE MARKET RECOVERY
While any growth over the next few years is a positive step in the right direction, we all agree organisations should utilise this time to support current requirements but also position itself for when the market does pick up. The forecasts from McKinsey Energy Insights can only reassure those organisations.
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