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Key Findings
  • 1

    Top finding

    Operating costs

    In response to limited demand for services and depressed day rates, rig owners have used innovative levers beyond the standard operational cost cutting, but it is becoming more difficult to reduce operating costs beyond the ~45% already achieved

  • 2

    Activity outlook

    Activity appears to have reached or neared the bottom, with most of the rig overhang from prior to 2015 having been removed and only 8-9% of the rigs active in 2015 still “at risk” of rolling off uncontracted before 2018

    3

    Drilling services demand

    Several events have occurred in the market that suggest increased demand for drilling services going forward: 6% expected growth in operator capex, FID on 2 deepwater projects in the first 2 months of 2017, and deregulation in Brazil and Mexico

  • 4

    Floating rig demand

    Floating rig demand is expected to reach the bottom of the current cycle in 2017 to 139 rigs, before growing at a long-term growth rate of 6% p.a. through to 2030. Utilization will recover to 2014 levels by 2022, with long-term floater supply growth of ~25% by 2030

    5

    Jackup demand

    For jackups, demand is expected to bottom out in 2017 at 295 rigs, before eventually growing at 2% per year through 2030. Utilization will recover to above 80% utilization by 2021, and extensive retirements of older, lower-spec rigs is expected to drive a 7% decline in the increasingly high-spec jackup fleet to 489 rigs by 2030

Key charts and tables
  • 1

    Market overview

    • Utilization for floaters and jackups
    • Operating costs and margins
    • Active contracts for floaters and jackups
    • Total capex
    • Recent FIDs
    2

    Floating rig outlook

    • Fleet size and day rates
    • Current fleet deployment, owner compositions, and contract status
    • Total production in deepwater outlook
    • Short-term demand outlook
    • Key growth regions
    • Long-term supply-demand balance and market utilization
  • 3

    Jackup outlook

    • Fleet sixe and day rates
    • Current fleet deployment, owner compositions, and contract status
    • Total production in shallow water outlook
    • Short-term demand outlook
    • Key growth regions
    • Long-term supply-demand balance and market utilization
Table of contents
  • 1

    Market overview

    Overview of the current market activity impacting offshore drilling including:

    • Impact of oil price decline on offshore production
    • Resulting impact on the offshore drilling market
    • Actions taken by drilling contractors to mitigate the downturn
  • 2

    Floating rig outlook

    • Demand outlook for floating rigs with regional granularity through 2030
    • Fleet supply dynamics including outlook on fleet utilization
  • 3

    Jackup outlook

    • Demand outlook for jackups with regional granularity through 2030
    • Fleet supply dynamics including outlook on fleet utilization