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Offshore : Drilling activity continues to rise, hitting 11-month high
Offshore drilling activity continued its upward swing during week 16 2021, with the most contracted rigs for both the deepwater and shallow-water markets in 11 months
Rivera –by John Snyder
Global offshore jackup rigs climbed to 335 units with drilling activity up across the board, led by the North Sea and southeast Asia sectors with 26 and 32 active units, respectively. Floater activity, too, was up, reaching 115 actively drilling units, according to Westwood Global Energy’s RigLogix. Both figures were at their highest levels since May 2020.
Brent crude oil futures continued to trade at above US$60 per barrel. As of 6:51 AM EDT, Brent crude (ICE) June 2021 futures were US$65.97, down fractionally by US$0.60.
Rystad Energy oil markets analyst Louise Dickson noted some bearish developments weighing on oil prices. “A forecasted build of US crude inventories, a bill passed by a US House panel to challenge OPEC’s work to protect oil prices, and a continuous rise of Covid-19 infections in India and other countries weighed on prices,” said Ms Dickson.
She added that the “grim Covid-19 records in both deaths and infections are ringing alarm bells on trader floors” because “India is a huge consumer of oil and the possibility of consumption disruptions there amid a possible economy slowdown affects prices.
“However, India’s announcement not to resort to a full national lockdown and instead prioritise the economy is keeping losses moderate.”
The good news in the US is that more than 50% of the adult population in the US has received at least one jab of Covid-19 vaccine, with about 28M dose being delivered weekly. The Biden Administration is aiming to restore some semblance of normalcy to the lives of everyday Americans by 4 July – the US Independence Day holiday. If reached, this goal would be in time for the peak US travel season, suggesting an increase in demand for gasoline and jet fuel. Additionally, the anti-OPEC legislation appears to have little chance of passage into law.
Meanwhile, positive sentiment continued in the offshore drilling market in the Norwegian Sea. Harsh environment semi-submersible Transocean Norge will continue drilling in the Tyrihans field for Equinor, Total E&P Norge and Vår Energi, after finding resources estimated at between 3.0 and 4.2M standard cubic metres of recoverable oil equivalent, corresponding to 19M–26M barrels of oil equivalent.
