Seadrill Boosted by $4B GoM Drilling Contract

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Seadrill Boosted by $4B GoM Drilling Contract


Category: Energy

The deal, one of the biggest in the global rig industry, could herald further rig orders as the global oil industry is struggling to find enough equipment to meet its surging production demand, the firm added.

The Oslo-listed rig company, which operates and leases a 46-strong fleet of drillships and rigs, has been on an aggressive rig spending spree in recent years, awaiting delivery of nearly 20 new ships and rigs as it aims to keep up with fast-paced developments in oil exploration.

“We are fairly comfortable in our view that there are not enough rigs to cover the oil companies’ needs in the coming three years,” Tor Olav Troeim, a top aide to Seadrill’s controlling shareholder John “Big Wolf” Fredriksen, said on Wednesday.

Global oil firms have been on an exploration spree, taking advantage of lucrative offshore finds in frontier areas like Brazil, East Africa and the Arctic, and the boom is creating a shortage for equipment.

As only a handful of shipyards can produce the highly-technical drilling rigs, drilling firms have scrambled to secure newbuild contracts and most have tied down their capacity for years to come.

Nevertheless, Fredriksen, an iconic figure in the global shipping business, has consistently been able to secure yard capacity in recent years and now has one of the largest order books.

“We are not afraid to order more,” he said, adding that most rig players have weak finances and are wary to place orders for new rigs. “That means that this situation will last much longer than most are counting on.”

Source: Reuters

Published: February 29, 2024