It was a busy 12 months in a number of areas, not least in terms of new build rig construction. 69 Mobile Offshore Drilling Units were delivered, an increase over 2012 of almost 100%. In total US$23 billion of assets left shipyards around the world and more than half are on contracts with Field Operators.
The trend of building Drillships and Jackups continues with 44 and 19 delivered respectively in the year. 2013 appears to be the first of three peak years, with 2014 and 2015 also seeing more than 60 MODUs due to be delivered
A record number of orders were also placed in 2013, with 54 Jackups, 6 Semisubmersibles and 8 Drillships worth US$19 billion. The total CAPEX committed is down on 2012 levels of US$34 million. However, the mix of orders has changed from deepwater in 2012 (33 Drillships and 12 Semisubmersibles) to shallow water in 2013 (54 Jackups), meaning that the average CAPEX per rig is down from US$513 million in 2012 to US$281 million per rig in 2013.
Across rig types, the average CAPEX cost per rig was down in 2013 for the first time in more than 5 years. This decrease could be explained by a number of factors, not least the 300% increase in orders of Jackups from China and Singapore and the number of Drillships that have been ordered as part of the ‘bulk’.
Another interesting area of trends from 2013 is in the award of contracts to Drilling Rigs. In total 455 contracts were awarded in 2013, of which 284 were for a 2013 start date, a further 124 for a start date in 2014, and the remaining 47 to commence in 2015 or later. This differs a great deal depending on the type of Rig, with Drillships in particular showing more contracts awarded for 2014 and beyond (28) than for in 2013 (19). This is due in part to the number of contracts being awarded to Drillships still under construction but also the desire of Field Operators to secure rigs early for their deepwater projects.
The average length of time between the award date and the start date was 11 months. For contracts commencing in 2013, however, the average length of time between the contract award and start date was just 3 months, which further reflects the short to medium term nature of the contracting market at present.
2013 saw an increase in the average length of contracts for all types of Mobile Offshore Drilling Units. Drillships in particular have seen contract lengths increase by 250%.
Finally, the drilling rig market continued to tighten in 2013 with utilization rates remaining in the 80% range and significantly tighter for Drillships at almost 90%. Day Rates increased steadily through the year by around 10% across all types of MODU with Jackups and Drillships experiencing the biggest increases in percentage terms. Our forecasts indicate that Day Rates will continue to rise over the next 24 months across all regions in the next 3 years