NORTH SEA RIG MARKET - November 2018 

North Sea fleet continues to fall and mergers loom

The number of rigs based in the North Sea has fallen to 80 after reaching a peak of just over 100. The current fleet includes 40 jack-ups, 39 semi-submersibles plus one drillship which has not worked since 2014. The most recent changes to the fleet include Fred Olsen Energy’s decision to scrap the 1976-built semi-submersible Bredford Dolphin, along with the temporary departure of the semi-submersible Deepsea Stavanger to South Africa and the jack-up Rowan Norway heading to the Mediterranean, while the jack-up Noble Sam Hartley is a recent arrival and on contract with Total, operating on Elgin, in the central UK North Sea.

Other looming changes that will impact the North Sea fleet include the merger of Ensco and Rowan which is due to complete in second-quarter 2019. Another pending deal is Transocean’s acquisition of Ocean Rig. The Ensco/Rowan transaction will lead to a combined North Sea jack-up fleet of at least 13 rigs initially, possibly 14 if the Rowan Norway returns from the Mediterranean. The new company will rival Maersk Drilling, which also has 14 jack-ups in the sector, and the two will effectively control around 67% of the North Sea jack-up market.

Transocean’s move for Ocean Rig will only lead to the semi-submersible Leiv Eiriksson becoming part of Transocean's North Sea fleet.

Meanwhile, partly due to a smaller fleet but also increased contract activity, the current utilisation rate for jack-ups has climbed back to 70%, its highest level since May 2016. However, despite the leaner semi-submersible fleet size, utilisation appears to be on the slide for the winter period and stood at 56% at the end of October.

New contract activity was reasonably robust in October, with nine new awards in all - six to jack-ups and three for semi-submersibles - although the level of announcements was boosted by fleet updates emerging from some rig contractors for the fist time in three months.


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