Outlook still rosy in the Gulf

Day rates for Gulf of Mexico offshore service vessel operators were a mixed bag during November. However, the outlook remains extremely bright, partly a result of ongoing work from hurricanes Katrina and Rita. 

 

Operators of smaller supply vessels saw day rates rise by an average of nearly $1,000 while average rates for large supply vessels dipped slightly. Crewboat operators also experienced the same ups and downs. The average rate for smal crewboats increased $300 in November while rates for large crewboats fell nearly $200.

However, rates could see significant increases if one vessel operator’s experience holds true. The company, which is currently chartering its large supply boats at an average rate of $14,000 a day, expects to see rates of about $18,000 as contracts begin to roll over.

Part of the reason is that the offshore industry is still trying to recover from the recent hurricanes and will require supply vessels and crewboats to continue to assess and repair facilities. 

The Minerals Management Service reported at the end of November that more than a third of the Gulf’s oil production is still shut in, as is nearly 30 percent of natural gas production. 

Additionally, the Department of Energy reported that several offshore and onshore transportation facilities, including pipelines and onshore facilities, are still inoperable or are receiving gas or oil supplies but not both.

The jackup rig market is still extremely tight. Several jackup drilling rigs were destroyed during the hurricanes and Rowan Companies still plans to mobilize several jackups to the Middle East. While there may be slightly fewer rigs to service, one drilling contractor recently announced it plans to reactivate three rigs from its coldstacked fleet.

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