Analysts predict boost for offshore rig rates amid surge in activity

Offshore rig rates are due to surge within two years as activity accelerates, according to new data.

Consultancy Westwood Global predicts rates will increase by “at least 15%” for activated rigs by 2021.

It comes as activity in some regions is nearing 85-90% which historically has been the level at which day rates start to trend upwards.

Westwood has based the assessment on data from its RigLogix intelligence platform, which it relaunched today.

The firm said there are more than 200 drilling programmes planned over the next three to four years in areas including the Norwegian North Sea, South America and Africa which involve the use of semisubmersible rigs or drillships.

However,  the global utilisation for jackups in 2019 is “taking time” to recover so far, currently at around 70% compared to 60% a year ago.

Steve Robertson, head of rigs and wells at Westwood Global Energy Group, commented: “After an extended downturn, the market is watching closely to see when improved utilisation will yield higher day rates.

“There are certainly significant reasons to be hopeful.  In some areas, day rates are already hitting over $200,000, and continued demand for specific types of rigs such as ultra-deep water jackups is good news for the industry.

“The fact that some operators are committing to rigs far in advance is a clear sign that they are anticipating further day rate rises.”

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