February 12, 2010

No recovery seen in offshore rig day rates

Despite rising rig demand and fleet utilization in some offshore rig markets, offshore rig day rates remain flat or have declined.

The ODS-Petrodata Gulf of Mexico Jackup Day Rate Index declined this month to 168, giving up all of the gains made in December and January. The number of jackups working in the area has increased in recent weeks as operators slowly ramp up their drilling activities in the wake of rising oil and natural gas prices. However, day rates are unlikely to respond until fleet utilization improves even more.

Northwest Europe jackup fleet utilization has increased for the second consecutive month, but day rates remain unchanged. The ODS-Petrodata Northwest Europe Jackup Day Rate Index is at 341 this month, essentially the same as January.

The ODS-Petrodata Deepwater Rig Day Rate Index fell again this month and now stands at 626. Fleet utilization remains near 100 percent, and the segment is not expected to record any significant changes in either rates or demand in the near-term.

The ODS-Petrodata Mid-Water Depth Semisubmersible Day Rate Index is unchanged for the fifth consecutive month. Fleet utilization has softened a little, but it is the lack of new contract activity in the segment that is constraining movement in day rates.

The ODS-Petrodata Day Rate Indices track the movement of competitive mobile offshore drilling fleet day rates and utilization for four rig categories. Day rates are charted as an index with the average market day rate in January 1994 equal to 100. Utilization is the percentage of contracted rigs out of the total competitive fleet supply. The data is updated on the second Friday of each month by ODS-Petrodata. Additional information is available from ODS-Petrodata in Houston, Aberdeen, Oslo, Dubai and Singapore.