WorkBoat Watch

Gulf of Mexico: 2013 looks good

Since 2011, the U.S. Gulf has been on a steady growth path, and most expect E&P activity to continue to increase in 2013. As we reported in December, by late last year there were more deepwater rigs in the Gulf than there were before the Deepwater Horizon disaster.

Eight ultradeepwater drillships are scheduled to arrive in the U.S. Gulf in 2013 and 2014, and several more deepwater rigs are under construction.

Also, with several operators now working the shallow-water liquids-rich area on the shelf, demand for jackups in the Gulf has picked up. Hercules Offshore has reported that day rates for its jackup rigs have improved as a result of more drilling permit activity and its contracts are getting longer due to a shortage of quality jackups. Hercules is now getting contract terms of three-to-six months versus 30-60 days a year ago.

In its January issue, Offshore magazine cited an analysis by investment research firm ISI that said, “The deepwater Gulf of Mexico is in the early stages of an extended growth cycle and is poised to be the strongest offshore market in the world through 2015.”

Moreover, deepwater is experiencing a strong resurgence of E&P activity and is well on its way towards reaching a “new equilibrium” in 2013 according to Wood Mackenzie’s latest upstream outlook. The company said that exploration success in the deepwater Gulf in the 10 years before the Macondo incident built a momentum that has been slowed, but not diminished, in the two-plus years since the disaster. Wood Mackenzie said its positive Gulf outlook is based on a high level of investment, a wide range of opportunities and the large number of explorers.

“The moratorium and exodus of several mobile offshore drilling units from deepwater GOM in 2010 sharply hindered drilling activity through 2011, but it has rebounded very well in 2012,” said Lauren Payne, GOM analyst for upstream research at Wood Mackenzie. “We expect this trend to continue, driven primarily by development drilling as operators seek to boost production levels and bring new projects onstream.”

This is more good news for Gulf yards that build OSVs and companies like Harvey Gulf International, which is building a series of dual-fuel supply vessels for the deepwater market.