Abstract
The contract drilling market is characterized by three interrelated measures: utilization, dayrates, and fleet size. Utilization describes the proportion of rigs working to the available fleet at a specific time and place, while dayrates represent the average daily rental charged by rigs of a given class operating in a specific water depth category and region over a specific period. Contractors build rigs to generate cash flow and capture market share. Rig movements between regions are usually not rapid enough to create strong interregional correlations in dayrates and utilization. Rig demand is associated with oil prices which vary dramatically over time, and dayrates are highly variable. When rig supply exceeds demand, low prices result. We characterize global and regional supply, utilization and dayrate trends over the 2000–2010 period. The U.S. Gulf of Mexico was the least expensive jackup market during the decade, followed by the Persian Gulf, while the North Sea was the most expensive jackup market. The chapter concludes with a brief discussion of the contracts used in the industry and the primary customers in each regional market.
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Notes
- 1.
Petrobras’ role as the E&P monopolist allows drilling contractors to better match demand and supply from a central decision-making firm. Private oil companies also operate offshore Brazil, but about 90 % of the fleet is typically contracted to Petrobras.
- 2.
If correlations between markets were close to one, it would be more reasonable to consider the regional markets a single global market rather than a set of interacting regional markets.
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Kaiser, M.J., Snyder, B.F. (2013). Rig Dayrates and Utilization. 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_3
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DOI: https://doi.org/10.1007/978-1-4471-5152-4_3
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