Fourteen consecutive months of declining drilling rigutilization came to an end in July, according to Global Marine’smost recent SCORE report, or Summary of Current Offshore RigEconomics. And the Gulf of Mexico appears to be leading theturnaround.

Global Marine said its worldwide SCORE for July 1999 rose 1.5%from the previous month. Rig utilization rose 7.9% in the Gulf inJuly compared to June. Improvement was seen for both jack-up andsemisubmersible rigs, increasing 0.3% and 2.6%, respectively.

“Although international rig markets continue to be weak,improving conditions in the U.S. Gulf of Mexico are encouraging,”said Global Marine CEO Bob Rose. “Higher oil and gas prices appearto be providing the impetus for increasing drilling activity in theGulf of Mexico, primarily by many of the independent oil and gascompanies. Because of the size and scope of upstream projects inmarkets such as the North Sea and West Africa, long lead times andplanning horizons tend to cause those regions to respond moreslowly to changing economic conditions. So, while the rates ofdecline in the international rig markets have slowed, we have notyet seen the turnaround observed in the Gulf of Mexico.”

Global spokesman Michael Dawson said the company counts 184competitive rigs in the Gulf with 115 of them currently working,making for a 62.5% utilization rate. He said Global is at 100%utilization right now. “We expect to see the Gulf continue tostrengthen. We are bringing in two rigs from West Africa.”

The Baker Hughes rotary rig count for Friday, Aug.20, shows anincrease of three in the number of rigs operating in the Gulf to104 last week. That’s still down four rigs from the 108 operating ayear ago. Baker reported the North American rotary rig count was uplast week by 3 rigs to 907 from 904 the previous week. But at 907,the North American count is still down 87 rigs from the same perioda year ago when 994 rigs were active in North America.

Global Marine’s SCORE compares the profitability of currentmobile offshore drilling rig rates to the profitability of rates atthe 1980-81 peak of the offshore drilling cycle, when speculativenew rig construction was common. In the 1980-1981 period, whenGlobal Marine’s SCORE averaged 100%, new-contract day rates equaledthe sum of daily cash operating costs plus about $700 per day permillion dollars invested. A separate SCORE is calculated forvarious types of rigs and regions to indicate the relativecondition of rig markets. Regions included in the release are theU.S. Gulf of Mexico, the North Sea, West Africa, and SoutheastAsia. Rig types include jack-up and semisubmersible rigs.

The worldwide SCORE for all types of offshore drilling rigs rose1.5% to 23.6% from 23.2% in June. The July 1999 SCORE is a 66.9%decrease from July 1998 and a 31.4% decrease from the same periodfive years ago. The SCORE for the U.S. Gulf of Mexico increased7.9% to 20.7% from June’s 19.2%. The July 1999 SCORE is a 63.7%decrease from July 1998 and a 41.1% decrease from five years ago.

Houston-based Global Marine is one of the largest offshoredrilling contractors with an active fleet of 31 mobile rigsworldwide plus two new drillships under construction. In addition,the company is the world’s largest provider of offshore drillingmanagement services, employing approximately 10 additional rigs.

Joe Fisher, Houston

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