Archives

Home   >   Archives   

“Jackup Scrapfest 2018”

Rig Lynx
  • By Rig Lynx
  • Apr 20, 2018
  • Category : Archives
  • Views : 200

Nearly 20 jackups left the offshore rig fleet during the first quarter of the year. A lot more are coming as rig owners throw in the towel for their old assets.


As we’ve mentioned before, nobody likes scrapping jackups. They’re cheap to stack, risky and expensive to move, and generally have lower steel value than drillships and semisubs.

Until recently, owners have been reluctant to send them to the scrapyard. Now, as low dayrates persist and old rigs continue to rot, the likelihood that older rigs will ever come back into the market again has all but disappeared.

Owners’ realization of this, combined with higher steel prices and more scrap buyers in the market, is driving the trend in jackup scrapping we’re seeing today.

Jackup scrapping volume to triple in 2018

Looking at data from the Bassoe Analytics offshore rig database, 21 jackups left the fleet in 2017 (15 for scrapping and 6 for conversion). Although we’re only a little more than one quarter through the year, jackup attrition in 2018 has already reached 17 rigs.

Borr Drilling and Paragon Offshore (who are completing the transition process after Borr’s acquisition of Paragon), have together contributed to 11 of the 17 jackups sold in 2018. They’re expected to add another ten rigs from the stacked Paragon fleet over the next few weeks, bringing the total sold this year to 27 jackups.

But Borr’s not the only owner who’s getting in on the action. We expect to see up to 60 rigs scrapped or sold for conversion this year, around three times the amount sold in 2017.

Nobody knows what “real” jackup supply is anymore

There are currently 493 jackup rigs in the market plus 89 under construction. If we take out rigs which are non-competitive as defined by age (built pre-2000), special survey date (past due or soon due), stacking status (cold stacked), and delivery likelihood (in the case of newbuilds), we get to a potential supply range of 340–515 rigs, with a pool of 160 old rigs still in some state of competitiveness.

Real competitive supply in the jackup fleet is one of the great unknowns today. The pool of 160 old rigs (125 drilling plus 35 stacked) will determine what the supply number eventually becomes.

And over time, as operators’ preferences for newer rigs strengthen and owners forego investments to keep old rigs in service, more and more rigs in the “old pool” will end up at scrapyards.

The jackup “scrapfest” has officially begun and it’s going to intensify.

offshoreenergytoday.com David Carter Shinn

Brought to you bu OutPut and Rig Lynx

Comments (0)

Leave Comment


Check out our other stories

Rig Lynx
Mar 31, 2021

  Elton Group will invest approximately $121 million (FCfa 70 billion) as the concessionaire of the gas terminal at the Autonomous Port of Dakar, signifying the company’s growing role in Senegal’s gas-powered energy transition.   The multi-phased project will involve the construction of a gas terminal for the production, storage, regasification and distribution of Liquefied Natural Gas (LNG), featuring a storage capacity of 140,000 m³.   “The objective of the gas terminal will be to provide a logistical solution by providing LNG to the users that are energy producers, industries, cement plants, mining companies, LNG-powered vessels and neighboring countries,” said Abderrahmane Ndiaye, President of Elton.     In addition to strengthening the domestic gas value chain, the project will generate indirect and direct employment through its construction and operation. It will also represent one of the first projects of its kind in the region.    “Indeed, it would be the first port able to accommodate ships using LNG as fuel, which will give it a significant competitive advantage over other ports in the sub-region,” added Ndiaye.   Elton is a Senegalese petroleum distribution company with operations in Senegal and Gambia. Source: Africa Oil and Power   Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here

Rig Lynx
Mar 31, 2021

  PGS has been awarded a high-fidelity 3D exploration program by a supermajor offshore Egypt.   The survey will be acquired using an Extended Long Offset (ELO) configuration with Ramform Tethys towing a wide multi-sensor GeoStreamer spread with an additional source vessel located several kilometers ahead. This will enable efficient recording of offsets up to 16 kilometers critical for imaging deeper complex exploration targets. The source vessel will be towing a specially designed low frequency source.   The innovative ELO survey design combines optimal spatial sampling for better subsurface imaging together with long offset acquisition for accurate velocity model building. ELO is a cost competitive and efficient configuration compared to other solutions for imaging deep targets.   “We are very pleased to be awarded this contract, which secures PGS vessels to operate in Egyptian waters until May 2021, building on an extended campaign for several super majors since July 2020. In a rapidly changing energy market, exploration seismic requires increasingly advanced survey designs, such as the ELO configuration, to generate high quality seismic data in complex geologies.,” says Nathan Oliver, EVP Sales & Services of PGS.   Source: Africa Petroleum   Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here

Rig Lynx
Mar 30, 2021

  Eni CEO Claudio Descalzi, and the President General Manager of the Algerian state company SONATRACH, Toufik Hakkar, met at the Eni headquarters in San Donato Milanese to take stock of common activities and sign various agreements in the exploration and production, research and development, decarbonization and training fields. These agreements mark a further step forward in strengthening the partnership between the two companies.   The first of the agreements signed aims to implement an ambitious program for the relaunch of exploration and development activities in the Berkine basin region and provides for the creation of a gas and crude oil development hub through a synergy with existing MLE-CAFC installations. This agreement is part of the process for the finalization of a new hydrocarbon contract in the basin, under the aegis of the new Algerian oil law which came into force in December 2019.   Claudio Descalzi and Toufik Hakkar also signed a Memorandum of Understanding for the development of the partnership between Eni and Sonatrach in the new technologies sector, with a focus on renewable energy, biofuels and hydrogen. This agreement aims to strengthen the cooperation already in place between the two companies in the technological field and continue the decarbonization path undertaken to support the transition towards a low carbon future.   Eni and Sonatrach also agreed to collaborate in other sectors such as staff training, through the signing of an agreement that provides for cooperation between Eni Corporate University and the Institut Algerien du Petrole for the implementation of training programs in the Upstream and new technologies related to the energy transition fields.   At the end of the meeting, Eni’s CEO thanked the PDG and the members of the Sonatrach delegation for their constant collaboration and relationship: “Today’s agreements represent the commitment made by our companies to strengthen a historic partnership, in compliance with a shared strategy to accelerate the development of decarbonization projects as part of our commitment of achieving our carbon neutrality goal.”   Eni has been present in Algeria since 1981 where is operator in 48 mining permits. With an equity production of 90,000 barrels of oil equivalent per day, Eni is the main international company operating in the country.   Source: Africa Petroleum   Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here