Latest analysis from Westwood Global Energy Group (Westwood), the specialist energy market research and consultancy firm, reveals a year-on-year growth for the global offshore rig market at the close of 2021, up 200% from 2020. This has been bolstered by significant engineering, procurement and construction (EPC) spend, closing last year at $41.7bn, close to 2019 levels.
Further analysis shows that global rig contract fixtures, including options exercised, totalled 142 in 4Q 2021, representing 54,829 rig days, a 155% increase compared to the previous quarter, adding some much-needed optimism following a period of turbulence.
Alex Middleton, Senior Market Analyst at Westwood said: “Several major drilling regions, including North America, South America and the Middle East have experienced minimal fall out. In fact, South America has fared particularly well, ending last year in better shape than before the pandemic. Brazil remained particularly buoyant, with high EPC spend coupled with no instances of contract cancellations resulting in continued drilling throughout the period.”
However, industry growth is globally uneven with Africa, Southeast Asia and the North Sea falling behind due to the pausing of major drilling projects in response to political and legal uncertainty. For instance, the controversial Cambo project in the UK West of Shetland that was put on hold in 4Q 2021, after Shell announced it was pulling out of the development. In response, Siccar Point Energy (SPE), operator with 70% interest, decided to pause the project since it couldn’t proceed with the original timescale. According to SPE, Cambo could deliver 170 million barrels of oil over 25 years, and 53.5 billion cubic feet of gas. Exploration licences date back to 2001 and the current licence is due to expire in March 2022. The UK government is required to approve drilling.
Alex continues “For these regions, contracted rigs have been on a downward trajectory, hitting rock bottom at the close of 2020. Drilling projects have been halted amidst uncertainty, however there are several major projects on the horizon that, if picked up, could help drive a recovery.”
This new analysis accompanies the launch of Westwood’s RigLogix Advanced; an optional extension to its existing RigLogix solution designed to bring a greater level of clarity, knowledge share and data integration, allowing for more strategic and operational decision making. Alongside the new quarterly Global Offshore Rig Market report covering key trends and developments, new tools include Supply and Demand Scenarios to match requirements and rig availability, Private Requirements which allows a user to add their own requirements or duplicate, and amend a RigLogix database entry and, Custom Notes which brings even further knowledge sharing and collaborative functions to RigLogix.
Read the latest issue of the OGV Energy magazine HERE
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