NORTHWEST EUROPE MODU MARKET: COULD 2019 DEMAND EXCEED AVAILABILITY?
Westwood’s Offshore Drilling Rigs Senior Analyst, Teresa Wilkie on what to expect from a changing Northwest Europe market following a change in the demand supply balance.
Since the oil price crash in 2014, the global mobile offshore drilling unit (MODU) market has suffered through a rig demand collapse, which coupled with a vast oversupply of units resulted in dismal utilisation and dwindling day rates.
The Northwest Europe MODU market, especially off Norway, has shown recent signs of utilisation improvement, due to a more stable oil price, an uptick in development and exploration and appraisal (E&A) activity, as well as a substantial number of older rigs being permanently removed from the fleet. The combination of increasing demand and decreased supply has resulted in rising day rates, most notably in the 6th-generation Norwegian semisub market. New fixtures for rigs in that segment have improved to the point that rates are now among the highest in the world.