Hurdles Will Keep Deepwater Rig Fleet Size in Check
The heated global floating rig market has day rates for high-end units climbing over a half million dollars and toward a newbuild cycle that will (likely) never come.
It has been a tumultuous few years for offshore rig contractors operating in deep water across the globe. Over the past half decade, deepwater specialists Valaris, Diamond Offshore, Noble Corp., and Seadrill have filed for Chapter 11 bankruptcy protection, due in large part to the impacts of the COVID-19 pandemic that effectively shut down the market from 2020 until 2022.
A few years before that, Ocean Rig filed for Chapter 15 bankruptcy after lower oil prices prompted a series of contract cancellations for its drillship-heavy fleet, while rival Pacific Drilling suffered a similar fate that same year.
Post-pandemic, Transocean now owns the Ocean Rig fleet, Noble scooped up Pacific, and oil prices have risen and stabilized to the point that demand for deepwater rigs has been climbing. It’s a refreshing shift after 36 months of cold stacking, selling, or flat-out retiring assets from the marketed fleet.
Forty-nine floating units—37 semisubmersibles and 12 drillships, according to Westwood Global Energy Group—were expunged from the global floating rig fleet during the pandemic years. Most of these units were older and not likely to return to drilling service after any significant length on the sidelines.