March 21, 2020

Bassoe analysts commented on the actual floater market: “There is little to be excited about in the floater market. Uncertainty in the oil market caused by underlying demand issues and a new price war, now exacerbated by COVID-19, have led operators to reevaluate spending and investment decisions. Until the situation stabilizes we expect limited contracting activity and higher termination risk. Sudden forecast changes are likely, but we see the possibility of a reversion to lower dayrates and prolonged difficulties in moving towards a well-functioning market. Scrapping or conversions sales should pick up pace.”
According to the data provided by Bassoe Analytics the floaters utilization rate remains low with 56% and 61% for the semi-sumersibles, standard and harsh-environment respectively. Utilisation rate for drillships slightly exceeds 60%.
The new contracts signed in 2020 are all short to medium-term contracts. The longest contract is a one-year contract signed by Noble Corporation and ExxonMobil for the drillship Noble Sam Croft. Thanks to the prolific Stabroek Block, offshore Guyana.
The highest day rates go to the last generation hard environment semi-submersibles, mostly used in the North Sea, with $325,000. 8th and 7th generation drillship dayrates average $225,000. Murphy Oil recently extended the contract of the Pacific Sharav in the Gulf of Mexico for 3 month, increasing the dayrate from $225,000 to $230,000.
Walter Oil secured the ultra-deepwater semi-submersible Sevan Louisiana for four months at a dayrate of $145,000. Sevan Louisiana, commenced its first contract (3-year) in 2014 in the Gulf of Mexico with LLOG at a dayrate of $505,000.
Up to 87 floaters were sold for scrap or conversion between 2015 and 2017. 13 units were retired or converted in 2019.
Recently Allseas acquired the Vitoria 10000 drillship, idle in Brazil, for a polymetallic nodules recovery project. Turkish TPAO saved the 2012-built Sertao drillship from the scrapyard for $37.5 million. The refurbishment costs might be huge but the unit will be back to drilling in the Mediterranean or Black Sea.
The times for uncertainty will continue throughout 2020.
(Source: Bassoe Offshore)