Global Offshore Contract Drilling Market Forecast to 2023 - Lower Operating Costs Driving the Market - ResearchAndMarkets.com
DUBLIN--(BUSINESS WIRE)--Nov 22, 2018--The “Global Offshore Contract Drilling Market - Growth, Trends, and Forecast (2018 - 2023)” report has been added to ResearchAndMarkets.com’s offering.
Demand for offshore drilling rigs is directly related to the regional and worldwide levels of offshore exploration and development spending by oil & gas companies.
The sustained decline in oil prices in the past from 2014 high had caused a significant decrease in the demand for offshore drilling services as many projects became uneconomical, resulting in fewer market tenders in the recent periods. Since the beginning of the downturn, drilling contractors have retired approximately 100 floaters and 50 jackups.
As the market improves and demand increases, newer and high-spec rigs are expected to obtain contract awards first, increasing the likelihood that older and less capable ones do not return to the global active fleet.
With the sign of recovery, the utilization rate has shown some improvement, along with contract length. However, the day rates are still to show significant improvement.
Lower Operating Costs Driving the Market
Several major oil producing companies such as ExxonMobil, Shell, ConocoPhillips, and Chevron has succeeded in bringing the breakeven prices from around high level of USD 80 per barrel to about or less than USD 40 per barrel between 2014 and 2016, in different regions. The decline in breakeven cost is mainly due to the improvement in enhanced ultimate recovery, lower drilling and completion cost and structural changes.
Though the breakeven price has increased somewhat in the recent times, it is still lower than crude oil price. In June 2018, the Norwegian parliament approved the USD 5.85 billion development plan for the Johan Castberg project which is expected to start production in 2022. The development cost was cut since the 2013 plan to enable the project to break even at USD 31 per barrel rather than USD 80 per barrel.
Jackups is One of the Largest Markets
Jackups are the most popular bottom supported MODUs generally used for up to 400 feet of water depth, i.e., shallow water. Approximately 125 jackups which are older than 30 years are idle, and contracts for approximately 65 jackups which are 30 years or older are expiring by the end of 2018 without follow-on work. Expenditure required to recertify these aging rigs are cost intensive and is expected to be scrapped or cold-stacked, which is expected to continue during 2018 and into 2019.
The shallow-water jackups segment is on the road of recovery due to high commodity prices, and its utilization is anticipated to improve in the second half of 2018, as the rigs get deployed with increasing demand.
Demand for jackups rigs is expected to be driven by the Middle East, followed by Europe and Asia between 2018 and 2020. Competition is also expected to be significant as the new builds which were ideals in the past few years also start competing.
Market DevelopmentsTransocean Ltd. received a contract for ultra-deepwater semisubmersible GSF Development Driller I, an 11-well contract (approximately 955 days) commencing offshore Australia in the first half of 2019 with Chevron Australia. Excluding integrated services, the estimated firm contract backlog is approximately USD 158 million. Additionally, the contract includes four one-well options.
Key Topics Covered
1. Executive Summary
2. Research Methodology
2.1 Scope of Study
2.2 Market Definition
2.3 Study Assumptions
2.4 Study Deliverables
2.5 Research Phases
3. Offshore Contract Drilling Market Overview
3.2 Market Size and Demand Forecast until 2023
3.3 Offshore Rig Utilization Rates, By Region, 2006-2017
3.4 Global Offshore Active Rig Count of Major Countries
3.5 Offshore CAPEX Forecast in USD billion by Region, until 2023
3.6 Key Upstream Projects
3.7 Recent Trends and Developments
4. Market Dynamics
4.1 Offshore Contract Drilling Market Drivers
4.2 Offshore Contract Drilling Market Restraints
4.3 Offshore Contract Drilling Market Opportunities
5. Supply Chain Analysis
6. Industry Attractiveness - Porter’s Five Force Analysis
6.1 Bargaining Power of Suppliers
6.2 Bargaining Power of Consumers
6.3 Threat of New Entrants
6.4 Threat of Substitute Product and Services
6.5 Intensity of Competitive Rivalry
7. Market Segmentation and Analysis
7.1 Offshore Contract Drilling Market By Depth
7.2 Offshore Contract Drilling Market By Type
8. Regional Market Analysis
8.1 North America Offshore Contract Drilling Market
8.2 Europe Offshore Contract Drilling Market
8.3 South America Offshore Contract Drilling Market
8.4 Asia-Pacific Offshore Contract Drilling Market
8.5 Middle-East and Africa Offshore Contract Drilling Market
9. Key Company Analysis
9.1 Transocean Ltd.
9.2 Seadrill Ltd.
9.3 ENSCO PLC
9.4 Noble Drilling PLC
9.5 Diamond Offshore Drilling Inc.
9.6 China Oilfield Services Limited
9.7 Rowan Companies PLC
9.8 Maersk Group
9.9 Ocean Rig UDW Inc.
9.10 Saipem SpA
*List not Exhaustive
For more information about this report visit https://www.researchandmarkets.com/research/wcxccx/global_offshore?w=4
View source version on businesswire.com:https://www.businesswire.com/news/home/20181122005184/en/
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Related Topics:Oil and Gas Exploration and Production
INDUSTRY KEYWORD: ENERGY OIL/GAS
SOURCE: Research and Markets
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PUB: 11/22/2018 06:30 AM/DISC: 11/22/2018 06:30 AM