Gulf market remains soft

By early April, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) had approved 11 deepwater drilling permits. Since then, approvals for new permits have seemingly dried up.

That’s not necessarily the fault of BOEM. Several operators have submitted new exploration plans and applications for permits that have been returned to the operators for additional information, and they must be revised and resubmitted. At presstime, however, few if any of the operators that received the 11 permits have started drilling wells.

As a result, at the end of April the Gulf of Mexico working rig count was about at the same level as it was at the end of February. On April 30, there were eight semisubmersibles and five drillships working in the U.S. Gulf compared with seven semis and three drillships at the end of February. The number of working jackups on April 30 was 29 compared with 32 at the end of February.

The continued weakness in the rig markethad little effect on the offshore service vessel market in April. That’s because OSV demand was already weak. There was some positive news, however, with a small improvement in rates and utilization for some vessel classes including large supply vessels, which broke the $10,000 per day average rate mark.

But more improvement in rates and utilization isn’t expected anytime soon. One vessel owner who had several warm-stacked boats available for immediate work said his company was able to push day rates for 240-foot DP-2 units to over $14,000 per day during April. But when other boat owners caught on, they began reactivating a few of their cold-stacked units, which drove average day rates back down to around $10,000.

To lessen the blow from the weak U.S. Gulf OSV market, some operators are continuing to relocate vessels to international markets. 

About the author

Workboat Staff

Leave A Reply

© Diversified Communications. All rights reserved.