Better things ahead for drilling rigs

Better things ahead for drilling rigs

27-09-2018 12:00:00

The drilling rig market is one of the segments most affected by the oil crisis, which started back in 2014. Maersk Drilling recruited 500 people just before the crisis hit, and subsequently fired the same amount when the company saw the effects of the crisis. Now it seems that things are looking brighter and the company is preparing for next years stock exchange listing.

”It has been hard. We are aware of that this is a cyclical industry, but this wave has been darker and deeper than before. There has been a continuous fall for all rig operators. Today we have four active rigs in Norway, "says Jakob Korsgaard, Managing Director of Maersk Drilling Norway

The company’s activity level peaked in 2015. Back then, nine of the company’s rigs were operating on Norwegian socket, and the tenth was being build. In January 2015 the company had 1.350 employees in Norway, but today the number is 850. This means that 500 eployees had to be let go.

The rig market is still in bad shape, but it seems the future looks a bit brighter. Maersk will soon have two rigs back in operation on the Norwegian continental socket. In October, Maersk Reacher will begin a two-year contract with Aker BP, and Mærsk Inspirer will begin a long-term contract on the Yme field for Repsol next year.

"The demand for rigs is steadily increasing. This is because costs in the industry have become so low that the oil companies now want to own rigs again. In general, we look forward to market growth and believe in further growth, "says Nordea analyst Janne Kvernland.

According to Kvernland, this entails higher prices. The rates for advanced oil platforms in the North Sea have more than doubled and currently amount to almost 3 million NOK a day. The price on other types of rigs is also increasing.

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