Rig dayrates and utilization

Document Type

Article

Publication Date

1-1-2013

Abstract

The contract drilling market is characterized by three interrelated measures: utilization, dayrates, and fleet size. Utilization describes the proportion of rigs working to the available fleet at a specific time and place, while dayrates represent the average daily rental charged by rigs of a given class operating in a specific water depth category and region over a specific period. Contractors build rigs to generate cash flow and capture market share. Rig movements between regions are usually not rapid enough to create strong interregional correlations in dayrates and utilization. Rig demand is associated with oil prices which vary dramatically over time, and dayrates are highly variable. When rig supply exceeds demand, low prices result. We characterize global and regional supply, utilization and dayrate trends over the 2000–2010 period. The U.S. Gulf of Mexico was the least expensive jackup market during the decade, followed by the Persian Gulf, while the North Sea was the most expensive jackup market. The chapter concludes with a brief discussion of the contracts used in the industry and the primary customers in each regional market.

Publication Source (Journal or Book title)

Lecture Notes in Energy

First Page

51

Last Page

72

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