Borr Drilling: Demand for Jack-Ups to Grow. 2019 Was a Record Year

OE Staff
Friday, February 28, 2020

Jack-up drilling contractor Borr Drilling's Chairman has said that 2019 was a record year when it comes to jack-up rig contract years awarded and that demand is high for modern jack-ups.

In a statement Friday, the Chairman of the Board, Paal Kibsgaard – ex-Schlumberger CEO -said the trend of increasing utilization and higher jack-up day rates seen in the first nine months of 2019, continued into the fourth quarter.

He said: “In 2019, 420 rig years [were ] contracted in the jack-up market, beating the 2013 peak of 410 rig years. In spite of the volatility seen in the global oil and equity markets so far this year, the growth in shallow-water drilling is set to continue in 2020.“

"This is driven by customers who have attractive shallow water acreage and are managing their resource base with a long-term view.#

Based on ongoing tendering activity and customer interactions, Borr, which owns 24 modern jack-up units – built after 2001  - expects there will be a requirement for more than 40 additional jack-ups to address the planned activity.

"This will likely consume most of the available modern jack-up capacity, setting the stage for further increases in utilization and day rates as the year progresses,” Kibsgaard said.

The Company currently has 16 rigs in operation: four in the North Sea, two in the Middle East, five in West Africa, three in South East Asia and two in Mexico.

Jack-up count to surpass 400

According to Borr, there are a total of 381 contracted jack-up rigs, up from 365 rigs per September 30, 2019. For modern rigs, contracted rig count stands at 263 representing an increase of approximately 86 rigs or 50% since 2014.

"There are currently only 34 uncontracted modern jack-ups. The Company estimates that only 14 modern units are warm stacked and are being actively marketed by international operators. Borr Drilling owns six of these units,” Borr said.

Borr Drilling said: “…We currently see a demand for more than 40 modern jack-up rigs in various tenders across the world. This includes 19 incremental rigs going into the Middle East, with UAE being a big driver with one NOC requiring up to 16 incremental modern rigs within first half of 2021. Mexico is also expected to require another ten rigs on top of what has already been contracted, and we expect SouthEast Asia, driven by Thailand, Malaysia, and Vietnam to require seven incremental rigs.

“Additionally there is incremental demand in West-Africa, India, China, and other jurisdictions. As a result of this and with a total of 381 rigs currently contracted, we expect the global jack-up rig count to significantly surpass 400 units in the next twelve months, which will push utilization to more than 95% for modern rigs.”

Borr on Friday posted rotal operating revenues of $92.9 million, a net loss of $69.3 million and Adjusted EBITDA of $1.8 million for the fourth quarter of 2019. Total operating revenues of $334.1 million, a net loss of $308.1 million and Adjusted EBITDA of $(2.6) million for the full year 2019

Categories: Drilling Industry News Rigs Exploration Shallow Water

Related Stories

CNOOC Puts Into Production New Oil Field in South China Sea

Borr Drilling Bags Three New Assignments for its Jack-Up Drilling Rigs

CNOOC Makes Major Oil and Gas Discovery in South China Sea

Eco Wave Finds Partner for Wave Energy Project in India

Europe's Gas Uncertainty Help Drive Asian LNG Spot Prices Higher

Vestas Lands First 15MW Offshore Wind Turbine Order in Asia Pacific

Shell Shuts Down Oil Processing Unit in Singapore Due to Suspected Leak

Flare Gas Recovery Meets the Future

China’s CNOOC Brings Bohai Sea Oil Field On Stream

Offshore Service Vessels: What’s in Store in 2025

Current News

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

Mitigate SCC & HE to Keep Offshore Metal Structures Ship Shape

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Sunda Energy Starts Environmental Consultation for Chuditch-2 Well Drilling Plans

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com