Abstract
The offshore drilling industry is composed of five markets engaged in the trade of a unique service or good. Mobile offshore drilling units are owned and operated in the contract drilling services market, supplied by the newbuild and secondhand markets, maintained and enhanced in the upgrade market, and complete their lifecycle in the scrap market. The purpose of this chapter is to describe the players, prices, activity and cash flows in each of the five offshore rig markets circa 2010–2011. Contract drilling and newbuilding are large transparent markets and activity is closely followed throughout the industry. From 2005 to 2012, contract drilling and newbuilding generated between $25–$50 billion and $10–$20 billion in transactions per year, respectively. Maintenance and upgrade activities are performed by a number of shipyards throughout the world, but because of the sporadic nature of the activities and limited record keeping, the market is difficult to track. The secondhand and upgrade markets are estimated to be worth between $2–$10 billion and $1–$5 billion annually. The scrap market is the smallest of the five markets and is poorly documented and worth less than $50 million during most years.
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Notes
- 1.
Cost information is not available for a small number of rigs built by state-owned shipyards for state-owned drilling contractors, and cost data may not be reported similarly in all cases, but these sources of bias are believed to be small both on an absolute and relative basis.
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Kaiser, M.J., Snyder, B.F. (2013). The Five Offshore Drilling Rig Markets. In: The Offshore Drilling Industry and Rig Construction in the Gulf of Mexico. Lecture Notes in Energy, vol 8. Springer, London. https://doi.org/10.1007/978-1-4471-5152-4_2
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