Report: Jackup market remains resilient, despite Saudi Aramco’s rig releases
The international jackup market remains resilient, despite Saudi Aramco’s rig releases, according to Evercore ISI’s latest Offshore Oracle report.
The report concedes that Saudi Aramco’s decision to release jackup rigs continues to raise questions about the future prospects of the Middle East jackup market, which has been a region that has absorbed assets globally over the past few years.
The Kingdom’s decision to maintain the government’s maximum sustainable capacity (MSC) directive, issued in January 2024, at 12 MMBbl/d and the shift in priorities toward natural gas have resulted in the deferral of two oil expansion projects and decreased infill drilling in oil fields, leading to the release of ~22 jackups year-to-date.
The Kingdom expects to release an additional five jackups, bringing the total number of jackup rigs to 27.
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However, jackup rigs from the initial releases have been picked up in other high-spec markets, including Southeast Asia, West Africa, and the Middle East/East Mediterranean. Following the first wave of releases, five jackup rigs have been recontracted at higher dayrates (double in some cases):
- ADES Admarine 694 was awarded a contract (1 year + 18 month option) in Qatar with TotalEnergies;
- ADES Admarine 502 was awarded an 18-month (+9-month option) contract with PTTEP in Thailand;
- ADES Admarine 262 was awarded a 21-month contract with SUCO in Egypt;
- COSL Zhenhai 6 was awarded a long-term contract with CNOOC in China; and
- Borr Drilling Arabia I was awarded a 1,460-day (+options) contract with Petrobras in Brazil.
The report did state that rig demand is expected to further decline in the Middle East before recovering in 2026 and beyond. Demand in the Middle East dropped from the peak of 173 rigs to 157 rigs under contract in August (from 183 to 172 contracted rigs). Under contract demand is anticipated to remain suppressed in 2025 (average of ~150 rigs) before recovering in 2026 to ~175 rigs. The pickup in demand will be driven by a combination of at least 10–15 rigs of the 27 suspended rigs expected to return to Saudi Aramco and incremental demand in Qatar, the UAE, Kuwait, and the neutral zone.
Source: Offshore Magazine
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