Chart of the Day: More orders to come for Singapore rig builders
Analyst expects order wins to return to pre-2009 levels of S$4.5 billion to S$5.5 billion per annum.
We believe the North Sea could be the next bright spot after Brazil to support an offshore newbuilding wave. This would be led by the world’s largest oil discoveries in 2011, Johan Sverdrup as well as breakthrough Barent Sea E&P in Skrugard, Norvarg and Havis. ODS-Petrodata forecasts that average demand for semi-submersible drilling rigs will increase to 47 units by mid-2013 with only 43 available in the market.
West Africa has pre-salt oil reservoir potential following recent discoveries by Cobalt and Maersk, offshore Angola. We could see a replica of Brazilian pre-salt discoveries jump-starting ultra-deepwater rig demand in the next few years. In the Gulf of Mexico, more drilling permits could lure the return of more rigs to the region. In Feb 12, 22 permits were awarded for new oil wells deeper than 2,000ft, a record high vs. an average of eight per month pre-Macondo.
We expect orders in this cycle to be dominated by a more diversified mix of harsh-environment products that command higher values, ranging from accommodation rigs (US$300m/unit) to heavy-duty and high-spec jack-ups (from US$450m unit). Singapore yards’ orders in the past 10 years had been dominated by benign-environment jack-ups (US$150m-200m each) and semi-subs (US$550m each).