Global Marine's Score of Day Rates (7011 bytes)
World offshore drilling markets last November were the strongest in 5 years, but day rates remained far too low to support construction of offshore mobile rigs.
So concludes Global Marine Inc. (GMI), Houston, based on its summary of offshore drilling rig economics (Score) as compiled in a monthly survey of world offshore drilling.
GMI's Score expresses offshore rig day rates as a percentage of the estimated day rates drilling contractors need to begin building rigs. Day rates necessary to spur construction are calculated as the sum of daily cash operating costs plus a capital recovery factor of $700/day/$1 million invested.
By that measurement, GMI reckoned world day rates for all types of offshore mobile rigs in November were only 36.17% of the level needed to justify building rigs, 4.1% more than in October 1994 but 5.5% less than world day rates in November 1993.
World day rates for semisubmersible rigs in November reached 31.68% of computed replacement cost - 13.1 % higher than in October-while jack up day rates dropped by 2.6% to 38.43%.
Markets in the North Sea accounted for most of the month to month gain for all types of rigs, accumulating a score of 34.54 last November, 14% higher than in October.
"Rising expectations of a scarcity of high specification semisubmersibles and jack ups in the U.K. North Sea are causing day rates to rise, even through current rig utilization rates are hovering around 80%," said C. Russell Luigs, GMI chairman and chief executive officer.
Meantime, the Score for Southeast Asian markets increased to 40.17 - up 6.6% - while Gulf of Mexico day rates slipped 1.7% to a Score of 35.15, nearly 19% less than 1 year ago.
Luigs said an unseasonal decline of rigs under contract in the Gulf of Mexico was a result of persistently weak gas prices on U.S. markets.
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