Reflecting a “significant” decline in Gulf of Mexico rig demand, Houston-based ODS-Petrodata Group (OPG) said Wednesday that its Offshore Rig Date Rate Indices, updated monthly, continue to decline, which is having a “dramatic” impact on the region. The decline, it said, is related to a drop in domestic natural gas prices, with the jackup fleet utilization plummeting from 95% at the beginning of the second quarter to 74% this month.

Thomas E. Marsh, OPG’s associate publisher, said that the Gulf of Mexico index stands at 168 this month, compared with a 216 rating at the end of the second quarter for rigs capable of working in 250-300 feet of water. Comparatively, OPG’s North Sea index, which has softened in the past month, has overall changed “little” in the past three months, and now stands at 284, he said.

Worldwide demand for deepwater drilling units has remained strong all year, according to OPG, with the deepwater drilling fleet’s utilization rate remaining above 94%. However, day rates for some deepwater drilling rigs have fallen in recent months, and worldwide declines may continue in the fourth quarter. “Day rates have softened a little as operators rationalize their deepwater drilling programs and seek to farm out rig time to other companies,” Marsh said.

The worldwide semisubmersible drilling fleet also “continues to experience unsettled demand levels,” reflected by the fleet’s falling day rate index. This month, the OPG worldwide competitive 2,001-5,000-feet semisubmersible day rate index stands at 160. “Utilization for this group of rigs has moved erratically during the course of the year, and this erratic movement is likely to continue into next year,” said OPG.

Day rates are charted as an index with the average market day rate in January 1994 equal to 199. Utilization is the percentage of contracted rigs out of the total competitive fleet supply.

OPG issues monthly day rate indices on or about the second Friday of every month. They are available on the company’s web site at www.ods-petrodata.com. The Offshore Rig Day Rate Indices show the movement of competitive mobile offshore drilling fleet day rates and utilization for four rig categories: worldwide competitive 5,000-plus-feet floating rigs; U.S. Gulf of Mexico 250-300-feet competitive jackups; worldwide competitive 2,001-5,000-feet semisubmersibles; and North Sea competitive jackups (non-harsh environment).

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.