Rigs leave, rates fall

As expected, vessel day rates and utilization continued to decline going into 2007 as the U.S. Gulf of Mexico market remains in the doldrums. All vessel categories posted lower utilization during January except for anchor-handling/tug supply (AHTS) vessels, which remained steady during the month, and the large crewboats, which posted slightly higher utilization but slightly lower day rates.

Small supply vessels saw their utilization fall two percentage points along with a significant average day rate decrease of $1,230. While large supply vessels experienced a flat utilization rate, their average day rate also fell, but only by $215 per day.

It’s not pretty out there. Rigs continue to move out of the region while jackup utilization falls. The anticipation of new vessels scheduled for delivery during 2007-2009 is also affecting the market, as are the boats delivered during a softening supply boat market in late 2006.

Three jackups mobilized from the Gulf during January, all to the Middle East. While the moves were not unexpected, they still impact the vessel market since all of the rigs were contracted prior to their departure. Also, as mentioned here before, when jackups leave, they are generally gone for several years and sometimes never return.

As these rigs were leaving, the number of rigs in the Gulf under contract fell, at one point by five units. These, too, were all jackups, although one of those rigs was able to find another job. Cinnamon Odell, editor of the Gulf of Mexico Newsletter , said two jackups and a semisubmersible departed the Gulf during January and another three jackups are scheduled to move out during February.

Her take on the Gulf: “Lackluster utilization, and more rigs leaving.”

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Workboat Staff

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