Seadrill Sees Bigger Drilling Market Slowdown

MarineLink.com
Tuesday, February 25, 2014

Reuters - The global oil drilling market will slow by more than expected over the next two years as energy firms save cash for dividends and delay exploration, Seadrill , the world's biggest offshore driller by market capitalisation, said.

Oil companies are struggling with cash outflows, while they also need to spend more just to maintain production levels at their existing assets, where depletion rates are high, Seadrill said on Tuesday.

"Combined with a relatively high dividend payout and increasing development cost to bring new production on stream, oil companies have limited opportunities to fund exploration activities," Seadrill, the crown jewel is shipping tycoon John Fredriksen's business empire, said in a quarterly results statement.

"In this regard, 2014 and 2015 may show slower growth in activity levels than earlier anticipated," it added.

It added that it sees "limited value" in increasing its own dividend further and would preserve funds for buybacks or later dividends.

By 0913 GMT, Seadrill shares were down 6.4 percent, underperforming a 0.3 percent fall in the European oil and gas index.

Seadrill had been on an order spree, adding ultradeep drilling vessels in recent years, but said it would now focus on its existing fleet until it sees oil companies raise spending.

Rates in the ultradeep offshore market, the most lucrative segment, peaked close to $625,000 a day last year and have since fallen to around $575,000 for the so-called 6th generation rigs. Analysts have predicted that those rates will sink further to between $525,000 and $475,000 per day.

"Based on the fact that this pause in spending has not been caused by oil price declines gives us confidence that this is a momentary pause rather than a cyclical downturn," Seadrill said.

It expects its first-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) to be flat or lower compared with the fourth quarter following a number of operational issues with several vessels.

But it expects year-on-year profit growth above 20 percent in subsequent quarters, it added.

For the fourth quarter, the company reported a 27 percent rise in EBITDA to $768 million, just ahead of forecasts for $754 million in a Reuters poll of analysts.

(Reporting by Balazs Koranyi; editing by Gwladys Fouche and Jane Baird)

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

People & Company News

New CEO for Evergas

Evergas has appointed Steffen Jacobsen as CEO of the company as of 8 May 2015 Mr. Jacobsen joined Evergas 1 February 2015 as Vice President, Fleet after almost 35 years in Maersk.

NCSP Group Cargo Traffic Up 6% in Q1 2015

Novorossiysk Commercial Sea Port Group (NCSP Group or the Group) (LSE: NCSP, Moscow Exchange: NMTP) reports that Group’s consolidated cargo turnover in Q1 2015 increased by 2 million tonnes or 6.

Naming Ceremony of Evergreen's EVER LYRIC

Evergreen Group today held the naming ceremony for EVER LYRIC, the eighth of its L-type vessels built by CSBC Corporation in Taiwan. The ceremony took place

Finance

Seaspan Takes Delivery of New Containership

Seaspan Corporation (SSW) has accepted delivery of a 14000 TEU containership, the YM Wellhead.    The new containership, which was constructed at Hyundai Heavy Industries Co.

'Make in India’ - the Newbuzzword in Indian Shipping Sector

The Prime Minister Narendra Modi's  'Make in India’ initiative offers a plethora of opportunities in the maritime sector, particularly in shipbuilding, with the

Baltic Index Perks up on Increased Rates for Bigger Vessels

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, edged higher on Thursday as rates for bigger vessels rose.

Energy

New CEO for Evergas

Evergas has appointed Steffen Jacobsen as CEO of the company as of 8 May 2015 Mr. Jacobsen joined Evergas 1 February 2015 as Vice President, Fleet after almost 35 years in Maersk.

Icebreakers Ordered for Neft’s Novy Port Project

Aker Arctic’s icebreaker design selected for Gazprom Neft’s Novy Port project   Aker Arctic and Vyborg Shipyard have confirmed a contract for the design of two

MacGregor's Pusnes bow loading systems for Suezmax Tankers

MacGregor, part of Cargotec, has secured contracts to supply Pusnes bow loading systems for three newbuild shuttle tankers intended for operations in Brazilian waters.

News

New CEO for Evergas

Evergas has appointed Steffen Jacobsen as CEO of the company as of 8 May 2015 Mr. Jacobsen joined Evergas 1 February 2015 as Vice President, Fleet after almost 35 years in Maersk.

NCSP Group Cargo Traffic Up 6% in Q1 2015

Novorossiysk Commercial Sea Port Group (NCSP Group or the Group) (LSE: NCSP, Moscow Exchange: NMTP) reports that Group’s consolidated cargo turnover in Q1 2015 increased by 2 million tonnes or 6.

Naming Ceremony of Evergreen's EVER LYRIC

Evergreen Group today held the naming ceremony for EVER LYRIC, the eighth of its L-type vessels built by CSBC Corporation in Taiwan. The ceremony took place

Offshore Energy

New CEO for Evergas

Evergas has appointed Steffen Jacobsen as CEO of the company as of 8 May 2015 Mr. Jacobsen joined Evergas 1 February 2015 as Vice President, Fleet after almost 35 years in Maersk.

Royal IHC Launches Sister Pipelay Vessels

Netherlands-based Royal IHC today named and launched new pipelaying sister vessels, Sapura Jade and Sapura Ônix, in ceremonies at the company’s shipyard in Krimpen aan den IJssel, The Netherlands.

CWind Orders Four Crew Transfer Vessels

CWind, a provider of services to the offshore wind industry, has placed an order for four new crew transfer vessels from Aluminium Marine Consultants (AMC), a shipbuilding

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Offshore Oil Pod Propulsion Ship Electronics Ship Simulators Shipbuilding / Vessel Construction 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: 0.2114 sec (5 req/sec)