With a softening rig market upon us, now is a good opportunity for operators to secure a rig for drilling projects and at a significantly lower cost than the high rates we have been seeing recently.
Increasing availability and falling rig rates certainly paint a far rosier picture for North Sea operators than of late so they should grab this opportunity.
Many embarked upon cost-cutting initiatives in response to the recent surge in costs, caused in part by high rig day rates. This has resulted in options lapsing and excess time being available on long-term contracts, meaning sublet time emerging and even early termination of contracts.
We readily accept that there are still difficult times ahead for drilling contractors. Exploration is at an all-time low and investment is nose-diving. However, this dip in North Sea activity offers significant opportunities to capitalise on lower rig rates. We’re seeing reduced day rates as well as mobilisation and de-mobilisation numbers across the board and availability of rigs is steadily increasing.
As a result, operators should progress future drilling activity where possible if they are to make the most of these circumstances. Being drill ready and progressing well preparation in advance certainly helps.
Duncan Weir is a Rig Team Leader at AGR
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