Shortage of Ships May Complicate Call for Offshore Drilling

Thursday, June 19, 2008

The New York Times reported that a shortage of ships used for deepwater offshore drilling may impede any rapid turnaround in oil exploration and supply.
Slow growth in oil supplies, at a time of soaring demand, has been a major factor in the spike of oil and gasoline prices.  Demand is so high that shipbuilders have raised prices since last year by up to $100 million a vessel to about half a billion dollars, the report said.

As a result, drilling costs for some of the newest deepwater rigs in the -- the nation's top source of domestic oil and natural gas supplies -- have reached about $600,000 a day, compared with $150,000 a day in 2002.

These record prices have spurred a new wave of drill-ship construction. This boom could lead to renewed offshore oil exploration that would eventually bring more supplies to the oil market and push down prices.

Already, 16 new drill-ships are scheduled to be delivered to oil companies this year -- more than double the number delivered over the past six years combined.

Shipyards from to are working overtime to meet a huge influx of orders.

Transocean currently has nine deepwater rigs under construction, eight of which are already under contract for periods of four to seven years once they leave the shipyards.

Most new orders for drill-ships have gone to Asian shipyards. Companies in and have benefited, but 's big three have gotten the bulk of orders for the most complex and expensive types of vessels.

 

source:  News and Observer

 

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