It wasn’t long ago that producers bemoaned sky-high offshore rigday rates and said a turnaround in climbing rates was needed toprevent harm to the industry. Well, that turnaround seems to beunderway.

Worldwide offshore rig day rates dropped for the fourthconsecutive month in August, according to offshore drillingcontractor Global Marine. Global Marine’s August Summary of CurrentOffshore Rig Economics (SCORE) for August fell 5.2% from July to67.6% of estimated speculative new construction day rate levels.The August drop is the largest monthly decrease in the index sinceJanuary 1994.

However, the August 1998 SCORE is a 3.6% increase from August1998 and a 92.7% improvement from five years ago, Global Marinesaid.

“Depressed oil prices continue to take their toll on offshoredrilling activity, especially in the U.S. Gulf of Mexico,” saidGlobal Marine CEO Bob Rose. “The number of work-ready idle rigs inthe Gulf has grown from none in March 1998 to 27 at the end ofAugust. Near-shore rigs in U.S. waters have borne the brunt of cutsin drilling budgets to date. For example, day rates on some newcontracts for jack-ups in the Gulf of Mexico have fallen below$20,000, while severe-environment and deep-water semi-submersiblesin the North Sea and Brazil are still commanding rates in excess of$100,000 per day.”

The August SCORE for the Gulf of Mexico slumped 16.2% from July1998, the sharpest month-to-month decrease for any region sinceJanuary 1994. At 47.9%, the August 1998 SCORE is 19.8% lower thanin August 1997 but 20.4% higher than five years ago.

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