The global deepwater rig market, which has drawn the attention of Wall Street because of recent sharp declines in bids and dayrates, could see higher demand and rates by 2016 and 2017, analysts said.
New construction in the past few years has led a number of semisubmersibles and drillships starting to debut in the market at the same time that demand has weakened, largely because of the rising costs of oil services. That was the message delivered earlier this month at IHS CERAWeek in Houston, when Chevron CEO John Watson cited a fivefold increase in offshore rig costs in the last decade. These factors have led to a notable slide in current dayrate bids to $400,000 or below for highly capable floating semisubmersibles that can work in water depths of 10,000-12,000 feet. That class of rigs was getting close to $500,000/day or above last year, International Strategy & Investment Group analyst Jud Bailey said in a recent report.