Oil Drilling Slowdown to Last 12-18 Months

MarineLink.com
Friday, February 28, 2014

By Balazs Koranyi, Reuters

The current slowdown in offshore oil and gas drilling will last 12 to 18 months, and the market for rigs will rebound in 2015, Maersk Drilling said, providing a more optimistic forecast than other drilling firms.

Oil companies are only delaying projects, Claus Hemmingsen, the chief executive of Maersk Drilling, a unit of Danish shipping conglomerate A.P. Moller-Maersk, told Reuters on Friday.

"I would rather call it a short-term softness than anything dramatic," Hemmingsen said in a telephone interview. "We see postponements, not cancellations, and I think that distinction is important."

Activity in the deep waters off West Africa and Brazil will suffer the most, he said. "There's two regions when you talk about deep water that stand out - that is West Africa and Brazil."

Other drilling companies have warned that the market could be slow for the next two years as oil majors delay projects and cut capital expenditure to save cash for dividends, while drilling companies add new vessels, creating overcapacity.

Analysts expect oil and gas capital spending to rise by 4-6 percent this year, a big drop from years of double-digit growth as the biggest offshore drillers such as Shell, Chevron and Statoil cut their budgets the most.

Transocean, which owns the world's biggest drilling fleet, predicted on Thursday it would take 18 to 24 months for demand to recover.

Seadrill, the world's biggest offshore driller by market capitalisation, warned this week that the sector would slow over the next two years.

But Hemmingsen foresaw that the dip in the market would last for 12 to 18 months.

"I actually think it's (going to be) shorter, because I see some activity and interest," he said.

"We'll see the market returning to a strong balance of supply and demand," Hemmingsen said. "These projects that are being postponed will come back. In 2015 and beyond, we'll see the market continuously on the strong side."

Hemmingsen said Maersk, which take delivery of six new rigs this year, will need several more units to meet its 2018 target for a $1 billion net profit but that no newbuild orders were imminent.

Maritime Reporter April 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

DNV GL Names Remi Eriksen Group CEO

Remi Eriksen has been appointed as the DNV GL Group’s new president and CEO, succeeding Henrik O. Madsen, who will retire August 1. The DNV GL board of directors

Aramco Offers Rare 1.5 pct Gasoil Cargo

Aramco Trading, the trading arm of oil producer Saudi Aramco, has offered a rare gasoil cargo with a 1.5 percent sulphur content for June lifting from Rabigh, traders said on Thursday.

Golden Ocean: Worst Bulk Market Since 1980s

Dry bulk shipping firm Golden Ocean reported first-quarter earnings below forecasts on Thursday and said its market had gone from "bad to worse" with market conditions not seen in three decades.

Energy

DNV GL Names Remi Eriksen Group CEO

Remi Eriksen has been appointed as the DNV GL Group’s new president and CEO, succeeding Henrik O. Madsen, who will retire August 1. The DNV GL board of directors

U.S.: Stronger Response in South China Sea Needed

By releasing video of Beijing's island reclamation work and considering more assertive maritime actions, the United States is signaling a tougher stance over the

Aramco Offers Rare 1.5 pct Gasoil Cargo

Aramco Trading, the trading arm of oil producer Saudi Aramco, has offered a rare gasoil cargo with a 1.5 percent sulphur content for June lifting from Rabigh, traders said on Thursday.

News

Israeli Port Workers Defy Court Order to Continue Strike

Striking Israeli dockworkers defied a court order on Thursday and shut down the country's two main seaports for a second day in protest at the creation of two new foreign-run ports.

New Ferry Safety Initiative from RINA

Italy-based classification society RINA informs it has launched a ferry safety initiative.    The Asset Integrity Management scheme for ro-pax ferries covers fire risk mitigation,

Korean Register Opens Green-ship Certification Center

The Korean Register informs it has formally opened the Green-ship Equipment Test Certification Center in Gunsan, Jeonbuk, Korea.   This large-scale facility will

Offshore Energy

U.S.: Stronger Response in South China Sea Needed

By releasing video of Beijing's island reclamation work and considering more assertive maritime actions, the United States is signaling a tougher stance over the

Fugro Extends Contract with McDermott

Fugro has been awarded a three-year extension to its existing contracts with McDermott Middle East, Inc. The contract covers the provision of survey, positioning,

First Damen Twin Axe for Offshore O&G

To develop its large fleet, Groen Offshore, Guard & Support has selected the first Damen Twin Axe Fast Crew Supplier 2610 to be customised with Offshore Oil & Gas standby capabilities.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Offshore Oil Pod Propulsion Salvage Ship Electronics Ship Simulators Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.3726 sec (3 req/sec)