Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Operators to retain whip hand in dayrate negotiations, Westwood projects

© Supplied by GazpromA rig silhouetted against dusk
Picture shows; A drilling rig. El Assel, Algeria. Supplied by Gazprom Date; Unknown

Westwood Global Energy Group expects rig demand to increase around the world but with no rapid increase in dayrates.

Globally, utilisation rates remain low, giving operators options and bargaining power.

Westwood has flagged a wide range of dayrates in different markets, with lows in North Africa. There are a “wide range” of requirements in the Middle East and North Africa, driving a wide spread of dayrates.

Westwood noted that some low specification rigs in North Africa were charging as little as $8,000 per day. At the other end of the scale, “super-spec” rigs in one Middle Eastern state reached $56,000 per day.

Graph with three horizontal bars © Supplied by Westwood
Picture shows; Variations in regional dayrates. Supplied by Westwood

The research house went on to give the example of Kuwait as seeing dayrates of more than $50,000 per day, for rigs with more than 3,000 hp.

“North Africa typically sees a larger fluctuation in rig dayrates due to short-term rig contracts, compared to the Middle East where longer contracts are more common, especially in key countries for regional rig demand such as Saudi Arabia and the United Arab Emirates,” said Westwood analyst Todd Jensen.

“Contracts in the GCC region are also heavily focused on health and safety, and past performance, making it harder for new contractors to enter the region. These longer contracts also mean we expect to see less variation in dayrates over the coming months and years as most contracts will be fixed for up to five years.”

Latin America

The research also highlighted a wide range of rates in Latin America. These range from lows of $10,000 per day to $48,000.

Dayrates vary less in this region, than in MENA, but there are still regional differences. In Argentina, for instance, the further south a rig is, the higher the dayrate. Distances also play a role in Colombia, with some contractors including the cost of mobilisation in the dayrate cost.

Westwood provides information via its Global Land Drilling Rigs (GLDR) tool, which covers the US, Latin America and MENA. It aims to provide contractors with insights into where onshore rigs can maximise profit. It will expand to cover the rest of the world over the rest of this year.

Recommended for you

More from Energy Voice

Latest Posts