Jackup market threatened by order slowdown
Only 16 jackup orders are currently in, compared to last year's 45.
According to Barclays, with only 16 jackup orders in 2012 so far, compared to 45 in 2011, there have been concerns of a softening in the jackup market and a subsequent slowdown in orders.
Here's more from Barclays:
Recent comments from James West, our U.S. Oil Services & Drilling analyst, suggest otherwise. We believe that the demand for new builds remains robust, supported by higher rig NAVs and increasing dayrates. A potential uplift in orders in 2H12 is supportive for our Singapore rig builder coverage.
Standard Drilling recently sold two rigs that it is building at Keppel at a c20% premium to their order price. We believe this highlights the continued strong demand for new rigs, with rig owners willing to pay a premium for delivery slots.
We believe the recent slowdown in orders could be attributable to the jackup market's higher sensitivity to commodity prices (relative to floating rigs), due to their shorter contract durations. However, with Brent seemingly stablilizing at $100/bl in recent weeks, we believe there could be further orders on the horizon.