North Sea jack-up fleet faces period of change and a cut in size
The North Sea jack-up rig fleet is entering a period of change which is likely to result in a much smaller fleet. Newcomer Borr Drilling is making some initial moves to trim its overall fleet following the purchase of Paragon Offshore earlier this year. Borr is in the midst of selling 14 rigs to an undisclosed buyer in a deal that is due to complete by early-June. However, the driller has already confirmed the Paragon C461, Paragon C462, Paragon C463 and Paragon HZ1 have been sold and it is possible some of Borr's other North Sea jack-ups could feature in the same deal. The ageing and cold-stacked rigs Baug, Brage, Eir and Fonn are thought to be other units likely to be offloaded at some point. Borr is still keeping the buyers name under wraps, but states none of the units being sold will be used for future drilling.
The North Sea fleet now contains 45 jack-ups and some believe the total has to drop below 40 before rig capacity starts to match work requirements and thereby improve rig utilisation; only when the latter occurs will dayrates start to improve.
Meanwhile, Noble will be adding to its North Sea fleet in 2019 by bringing the Noble Houston Colbert into the sector from the Middle East; the rig has been contracted for a seven-month term with an unnamed UK operator.
So far May has proven to be a quiet month for the semi-submersible sector. The main news has been Transocean's announcement that it is taking a 33% stake in the West Rigel newbuild that is in the Jurong shipyard, a project cancelled by Seadrill. The rig has been renamed Transocean Norge and Transocean will take full control of marketing and operations. The rig is due to be delivered by end-year and will be ready to drill in first-quarter 2019.
New contract activity in May so far consists of Awilco securing an 18-month commitment from Shell for the semi-submersible WilPhoenix; the fixture starts in September and involves an extensive well P&A programme. Another UK operator, Corallian Energy, has issued a letter of intent to Ensco for the use of a jack-up for a two-well programme, starting in the third quarter.
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