The Five Offshore Drilling Rig Markets

Abstract

AbstractThe offshore drilling industry is composed of five markets engaged in the trade of a unique service or good. Mobile offshore drilling units are owned and operated in the contract drilling services market, supplied by the newbuild and secondhand markets, maintained and enhanced in the upgrade market, and complete their lifecycle in the scrap market. The purpose of this chapter is to describe the players, prices, activity and cash flows in each of the five offshore rig markets circa 2010–2011. Contract drilling and newbuilding are large transparent markets and activity is closely followed throughout the industry. From 2005 to 2012, contract drilling and newbuilding generated between $25–$50 billion and $10–$20 billion in transactions per year, respectively. Maintenance and upgrade activities are performed by a number of shipyards throughout the world, but because of the sporadic nature of the activities and limited record keeping, the market is difficult to track. The secondhand and upgrade markets are estimated to be worth between $2–$10 billion and $1–$5 billion annually. The scrap market is the smallest of the five markets and is poorly documented and worth less than $50 million during most years.KeywordsScrap SteelFleet SizeDrilling EquipmentOffshore DrillingDeepwater DrillingThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.