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Richard Walker

POST BY:
Richard Walker
03.02.14



Industry Bifurcation?

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In 2003 more than 75% of the world’s Mobile Offshore Drilling Units (MODUs) were owned and operated by just 6 organizations.  Ten years on, the major players still dominate the market with nearly two-thirds of the MODUs owned and operated by the top 6 organizations.  The makeup of their fleets has changed, however, and a long period of consolidation, merger, acquisition and spin off activity has deeply affected the landscape.  Previously the dominant players sought to develop large and diversified fleets of Jackups, Drillships and Semisubmersibles and combine newbuild, and young rigs with older rigs.  The major players instead now target their fleets toward a specific market or requirement.
As the industry has gone through a fallow period of construction and entered another build boom, the major players have sought to offload their older rigs where they can and invest heavily in newbuild Jackups and Drillships.  With Transocean offloading their older Jackup rigs into Shelf Drilling and Noble Drilling’s announcement last year that they are looking at an option to spin off their older Rigs into a separate business, only Transocean, ENSCO and Diamond would be left among the dominant players with a fleet that combines old and new Rigs.  The definite split between the drilling contractors with older fleets and those who have invested heavily in newer rigs leaves very little in between.  As the chart below shows only 2 or 3 drilling contractors have fleets of a reasonable size that combine older and newer rigs, it also shows the trend towards the smaller players focussing on newbuild and young rigs.

 

Richard Walker

POST BY:
Richard Walker
03.02.14