DRILLING OUTLOOK
Top: Global offshore rig demand is ex-
pected to increase from 453 in Novem-
ber 2022 to 539 by December 2023, and
utilization will increase from 72% to 83%
in the same time frame, according to
Esgian Analytics. Bottom: New jackup
contracts this year have averaged 1.7
years in length – up from 1.3 years in
2021 – with several monthly averages
approaching or exceeding two years.
Much of this increase has been driven
by the Middle East, particularly Saudi
Arabia, where Saudi Aramco has
awarded several five-year contracts as
part of its move to increase production
capacity by 1 million bbl/day.
South America
South America is another potential area
of interest going into next year. The rig
count in 2022 was not particularly high
– six semisubmersibles and 12 drillships –
but a number of open tenders could signifi-
cantly boost those figures. For example, in
September TotalEnergies announced FID
on the shallow-water Fenix development
offshore Argentina. Shell and Ecopetrol
announced a discovery at Gorgon-2 off-
shore Colombia in August.
One of the main drivers in South America,
however, remains Guyana/Suriname.
ExxonMobil and Hess announced seven
new discoveries in the Stabroek Block
offshore Guyana between January and
July of this year – Fangtooth, Lau Lau,
Barreleye, Lukanani, Patwa, Seabob and
Kiru-Kiru. There are six drillships – four from
Noble Corp and two from Stena Drilling –
working for ExxonMobil offshore Guyana,
with firm charters stretching into late
2025 for the Noble rigs and 2024 for the
Stena rigs.
Also, ExxonMobil is looking into drill-
ing as many as 12 further exploration and
appraisal wells at the Canje and Kaieteur
blocks offshore Guyana in 2023-2024.
The operator has already drilled three
wells in Canje and two in Kaieteur, all
of which came up empty. In Suriname,
TotalEnergies and Apache announced dis-
“It’s really nice to have conversations with drilling
contractors where they’re actually enthusiastic
and optimistic. Not only are they getting to the
point where they can just pay their bills, we’re now
seeing that they can undertake new investment.”
- Cinnamon Edralin, Esgian
14 coveries at Krabdagu and Baja in Block 58
this year.
Brazil is another key driver of South
American activity. In April, Petrobras
issued a tender to contract as many as
eight deepwater rigs for three and four
years starting in 2023, and Esgian expects
Petrobras to issue more tenders next
year. These tenders are expected to push
dayrates upwards in the region from its
current levels around the mid- to high
$300,000s. Rates could exceed $400,000
next year, Ms Edralin said, adding that
most of the rigs in the eight-rig Petrobras
tender should remain in the mid- to high
$300,000s, with one of the low-spec float-
ers coming in just below $300,000.
By Westwood’s count, Brazil is currently
operating at 100% utilization with 25 float-
ing rigs, and Mr Childs said it’s a certainty
that the number will increase next year.
There are currently 16 drilling programs
for floating rigs where a rig inquiry or ten-
der is active. Four to eight additional units
could mobiliz e into the region through
2023. A revised fiscal regime has been a key
factor in driving operator interest to Brazil,
he noted. This includes a gradual shift
away from its bid round structure to the
Open Acreage program, where a bid round
is triggered by a company declaring inter-
est in a particular sector.
Contracts signed under Open Acreage
are concession agreements, where the
winning company holds exploration rights
to a block and is only required to pay a roy-
alty to the government. The previous bid-
NOVEMBER/DECEMBER 2022 • DRILLING CONTRACTOR
DRILLING OUTLOOK
The rest of the Golden
Triangle Another hub of the Golden Triangle
– the US Gulf of Mexico (GOM) contin-
ues to be the leader in terms of dayrate
movement. Rates for drillships in the
region have reached as high as $440,000
Active Rigs
Drillship Utilization
Semisub Utilization
Total Rigs
Jackup Utilization
Tender Utilization
100% 90%
100 80%
70% 80
60% 50%
60 40%
40 30%
20% 20
Committed Utilization %
120 Rig Count
ding regime required winning companies
to sign production-sharing agreements,
which adopt a split profit system where
the government and the winning company
agree to a share of the profits generated
from a block.
“With Brazil, we’re seeing the reports
every so often that show more and more
operators being approved to bid there, so
there’s clearly an interest from outside
operators,” Mr Childs said. “Also, given the
amount of production there, there’s no rea-
son to think that operators won’t continue
to be interested. They will definitely want
to operate there as long as the terms from
the government stay favorable in their
view.” 10%
0% 0
Jan-22 Feb-22
Mar-22 Apr-22
May-22 Jun-22
Jul-22 Utilization in the Asia Pacific region has increased across all rig types in the first half
of 2022 and is expected to keep increasing in 2023, according to Westwood Global
Energy Group. However, this is due in part to a drop in available supply, with several
jackups moving from Southeast Asia to the Middle East.
($480,000 including MPD services), while
dayrates for jackups are around $85,000.
Mr Childs believes rates for both rig types
will increase in 2023 – drillships could
reach $500,000, while jackups are likely to
see rates in the $90,000s.
The increase in dayrates have been
primarily driven by a limited rig sup-
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