NGI The Weekly Gas Market Report
The 20% boost to exploration and production budgets this yearshould result in record results for offshore drilling, especiallythe Gulf of Mexico, according to drilling contractor Global MarineInc.’s annual Summary of Current Offshore Rig Economics — SCORE.In November and December 2000, GOM drilling increased 3.5%, andsoared 58.2% from a year ago. Worldwide, drilling was up 49.7% from1999.
Jack-up drilling also jumped in the past year, up 68.5% from ayear ago, while semisubmersible drilling was up 23.8%.
“Offshore drilling markets enjoyed significant recovery in bothutilization and dayrates during 2000,” said Global Marine CEO BobRose. “With E&P company budgets nearly 20% higher, the outlookfor 2001 is very bullish — particularly for jack-up rigs, whichmay revisit 1997 highs.”
Rose noted that the drilling industry’s last recovery periodthree years ago was cut short by an economic downturn in Asia, anincrease in production by the Organization of Petroleum ExportingCountries and Iraq’s oil exports allowed by the United Nations.
“These factors are not there today,” said Rose. “If OPEC haslearned discipline, as they seem to have done, there will be alonger recovery this time.”
SCORE, published monthly, compares the profitability of currentmobile offshore drilling rig rates to the profitability of ratesusing 1980-81 as its baseline, the peak of the offshore drillingcycle when speculative new rig construction was common. Twentyyears ago, when SCORE averaged 100%, new contract dayrates equaledthe sum of daily cash operating costs and nearly $700 per day permillion dollars invested.
Along with its coverage of competitive offshore drilling rigs inkey drilling markets, a separate SCORE is calculated for certaintypes of rigs and certain regions. In its findings, Global Marinefound that GOM drilling had increased the most overall, bothannually and in the last five years, which was up 8.7%. In the pastyear, drilling increased 43.2% in the North Sea; 23.2% in WestAfrica; and 38.2% in Southeast Asia.
With an active fleet of 33 mobile rigs worldwide, theHouston-based company is considered one of the largest providers ofoffshore drilling equipment services.
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