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Friday, January 8, 2016

Offshore Rig Retirements to Accelerate This Year

 
ENSCO DS6 Drillship taking on fuel bunkers in Walvis Bay, Namibia during the transit to Angola and start of contract with BP. Photo courtesy of CellsDeDells / CC BY-SA 3.0
 
Helicopter operators and other service providers will suffer as retirements of offshore oil and gas rigs speed up this year, said Evercore ISI. Brazil posed particular concerns. 
 
The investment banking advisory firm’s latest monthly report said retirements slowed in December but will accelerate this year, according to various media reports. Evercore reportedly said spending on offshore rigs could rise late this year, but a sustained increase would require oil prices staying near $60 a barrel for several months. Prices this week fell to 11-year lows of less than $34 a barrel.
 
In Brazil, the advisory firm reportedly projected that the number of offshore rigs could fall below 35, the lowest level in nearly eight years. On Jan. 5, offshore drilling services provider Ensco said Petrobras has terminated its contract for the DS-5 deepwater drilling ship. (The contract is enmeshed in an ongoing corruption scandal in Brazil.) 
 
Elsewhere in the world, drilling services provider Transocean in late December said that Shell had ended its contract for harsh-environment rig Polar Pioneer; the contract was supposed to have run into July 2017. 
 
Transocean also said that Statoil had ended the contract six months early for the ultra-deepwater drilling ship Discoverer Americas because a lack of work for it. The rig had been operating in the Gulf of Mexico. 
 
 
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