DRILLING OUTLOOK
coming back, that’s making it a little bit
easier for companies to pursue deepwater.”
North Sea
The semisubmersible market in Norway is in a dry spell and could get worse at the
beginning of 2023. However, Esgian is forecasting that utilization will increase start-
ing mid-2023 and could even reach 100% by mid-2024.
ply. Floating rig marketed utilization has
remained at 100% throughout 2022, while
the 85% marketed utilization for jackups
includes just one available unit. Westwood
expects those numbers to continue into
next year.
“Rig owners in the Gulf of Mexico have
been pretty disciplined in that they haven’t
brought excess equipment into the region,
which has not historically always been
the case. No rig owners have moved any-
thing on speculation, so that full utiliza-
tion has been able to be maintained,” Mr
Childs said.
The limited nature of the US Gulf of
Mexico market is driven, in part, by the
US regulatory environment, Ms Edralin
said. The US Bureau of Safety and
Environmental Enforcement’s (BSEE) well
control rule, issued in the wake of the
Macondo incident, requires rigs working
in the US GOM to use BOPs outfitted with
double-shear rams designed to allow drill
pipe to be centered during shearing opera-
tions. The costs required to comply with
these regulatory standards limit the num-
ber of contractors working in the region
and puts upward pressure on dayrates.
“Even if you have a seventh-generation
drillship, it doesn’t mean you can just
automatically come into the US Gulf and
start working,” she said. “If an operator in
the US doesn’t have a rig, they will have to
either pay a rig contractor to get a rig ready
to bring it in, or they will have to get in line
and wait for one to become available. The
16 drilling contractors have created a very
tight market.”
The third hub in the Golden Triangle –
West Africa – could also see some improve-
ment in 2023. West Africa has 14 floating
rigs under contract, but Ms Edralin said
that number could increase to 20 in 2023,
depending on certain FIDs being reached.
For example, a joint venture between BP
and Kosmos is expected to make FID on
the Yakaar-Teranga development offshore
Senegal and the Orca discovery offshore
Mauritania by the end of the year.
In the near future, Africa may also see
expanded E&P activity outside the tra-
ditional western zones. This year, Shell
and TotalEnergies announced significant
discoveries offshore Namibia at the Graff-1
exploration well and the Venus 1-X well,
respectively. Shell is currently drilling its
second well on Graff, while TotalEnergies
is drilling its third on Venus.
Ms Edralin said both operators seem
“pretty keen on moving forward with
them, and they’re already looking at rigs
to potentially bring over there” next year,
in addition to the recently contracted
Deepsea Bollsta semisubmersible, which
should start work around the end of 2022.
The overall activity rebound seen in all
three parts of the Golden Triangle bodes
well for deepwater drilling moving for-
ward, Ms Edralin said. “People are optimis-
tic about deepwater again. They’re real-
izing that oil and gas is part of the energy
transition, and now that investors are
The North Sea region has been in flux
due to energy security concerns fueled by
Russia’s invasion of Ukraine in February
2022 and the subsequent sanctions on
Russian oil and gas that cut off a major
supplier to European markets.
Currently, the floater market in Norway
is in a significant quiet spell, but Esgian
expects that market to tighten consider-
ably in mid- to late 2023. In fact, competi-
tive utilization should increase from the
80% range in September 2022 to the high
90% range by the end of next year. There
is even potential to reach 100% utiliza-
tion, if all the planned long-term develop-
ment drilling programs kick off between
2024 and 2026 as currently forecasted.
Dayrates for contracts on rigs scheduled
to work in 2023 range between $340,000
and $400,000.
Prior to the Russia/Ukraine conflict,
Norway and UK had been fueled by “a lot
of idealism” about moving away from oil
and gas projects, Ms Edralin said. Now,
European governments are pivoting to a
more balanced view of the energy transi-
tion as it faces energy security concerns.
“There’s more of an understanding that
oil and gas needs to be part of the transi-
tion, so that’s leading to more collaboration
between renewables and offshore oil and
gas,” she said. “There are some potential
projects where they’re trying to decar-
bonize offshore projects, either through
electrification, or potentially hooking up
an offshore wind turbine to the rig or a
production platform, or using alternative
fuels like green hydrogen. They’re real-
izing that they can reduce emissions on
the rig while they’re producing the fossil
fuels that they need, until they get to a
point where renewables can meaningfully
increase power generation.”
As such, emissions reduction technolo-
gies will eventually become a prerequisite
for rigs working in the North Sea . Esgian
notes that of the 42 active rigs around the
world that have at least one kind of emis-
sion reduction system installed, 21 are
working in the North Sea. Globally, of the
13 operators using these 42 rigs, nine are
European-based operators. DC
NOVEMBER/DECEMBER 2022 • DRILLING CONTRACTOR