Zenith Energy

The UKCS rig market has seen a drastic reduction in rig utilisation due to market demand and oil price. Rigs coming off contract have been unable to secure additional work due to weak demand and rigs have been stacked around the UK.

The offshore rig market is potentially in its worst slump since the 1980’s with worldwide rig utilisation falling by around 20%. Day rates have followed and new fixtures, contract extensions and rate adjustments have fallen by as much as 50%.

In the UK, many units are classed as “cold stacked” while some have been kept “warm stacked” in the light of market recovery. Some units may ultimately be scrapped, following in the footsteps of the Transocean John Shaw leading to a reduction in the number of units available for work in the UKCS.

Semi rigs on contracts secured prior to the downturn are at high rates (ranging from $330k per day to over $400k) however there have been recent fixes around $100k per day. Jack Up rates have been quoted at $60-75k per day thus giving a true indication of where the market currently sits.

The result is a large number of idle rigs in 2017, however, as Operators requirements and Drilling Contractors plans firm up, the rig market is going through a highly uncertain period. With cold stacked units not coming out for short term contracts, it will not take much to take up the slack and potentially cause an increase in rig rates throughout the year.

For further information on the UKCS rig market and for your FREE UKCS Rig Availability report, please contact steven.miller@zenith-energy.co.uk

When it comes to drilling wells safely and efficiently, experience counts. Zenith and our team of highly skilled engineers have over 100 years’ experience of drilling wells across the globe. Projects cover E&A wells, production wells, platform, subsea, jack up, semi, drill ship, deepwater, HPHT, ERD, land and more, giving us the experience required to ensure your project is delivered safely and within time and budget.

To date, all of Zenith’s project management contracts have been delivered within the agreed AFE and with zero LTI’s proving our process works.