Northern Drilling sees improvement in harsh environment market demand visibility

Offshore drilling contractor Northern Drilling is seeing an improvement in demand visibility for the harsh environment drilling rigs, which is supportive of continued recovery and further rate increase in the market.

The West Mira rig
The West Mira rig; Source: Northern Drilling

According to Northern Drilling’s 3Q 2019 report on Friday, the company continues to hold a constructive view on the market and is positive on the long-term fundamentals.

Each quarter more signs of market stability and industry improvements are visible with an expectation to see this trend continue, the company said. Modern harsh environment market utilization has remained greater than 95% for the full year, while there is little incremental supply entering the market, and vintage units rolling off contract are likely scrapping candidates.

Additionally, Northern said, demand visibility is improving as the majority of near-term options are exercised combined with E&P companies entering direct negotiations with contractors. This is supportive of continued recovery and further rate increase in the harsh environment market that continues to show a strong preference for high specification and modern rigs like the West Mira and West Bollsta.

Furthermore, the company said that the benign ultra-deepwater market continues its slow climb to find a rebalanced position. Since the summer, numerous awards have been disclosed which continue to push the rates upwards, and several spot fixtures have recently been concluded at around $250,000 per day.

Active ongoing tenders in the market also reflect the increased duration of drilling programs supporting a further increase in day rates, Northern said.

The company concluded it is well-positioned for the next 15 to 18 months with the forward delivery dates it has secured for its 7th generation ultra-deepwater drillship fleet and looks to capitalize on a rebalanced market with timing opportunities to secure contracts that can support the takeout financing from the shipyard.

In related news, Northern is in dispute with South Korea’s DSME over a canceled drillship West Cobalt. The yard is challenging Northern’s cancellation, and the dispute is not expected to be resolved in the near future.

Offshore Energy Today Staff


Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email.

Also, if you’re interested in showcasing your company, product, or technology on Offshore Energy Today, please contact us via our advertising form where you can also see our media kit.

Share this article

Follow Offshore Energy Today

Events>

<< Dec 2019 >>
MTWTFSS
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5

Africa Oil Week 2020

For over 25 years Africa Oil Week has been the meeting place for Africa’s most senior E&P stakeholders.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >

2020 EXPLORATION AND PRODUCTION STANDARDS CONFERENCE ON OILFIELD EQUIPMENT AND MATERIALS

The development of consensus standards is one of API’s oldest and most successful programs.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply