The deepwater rig market has benefited from a bullish outlook over the past several months as many available rigs have been contracted, stacked rigs reactivated, and working rigs rolled to new, more lucrative contracts, including some fetching more than $500,000/day.
Today, however, some gray clouds loom on the horizon. New inquiries and contracts for floating rigs have slowed, driven by several factors including some regional softness in the Far East market, oil price visibility, projects competing for limited funds, and lingering questions about what the changing of the guard in Washington, DC, will truly mean for the oil and gas business in general.
These are just some of the issues that have resulted in project deferrals for some operators.
The good news is that many of the top offshore contractors have solid backlogs that will keep them busy during the trough, which is expected to last at least through the first 6 months of the year. Transocean booked nearly $1.3 billion in backlog in the third quarter of 2024 alone. The recent awards will keep the company’s active fleet more than 97% utilized for 2025.
Noble Drilling, fresh from closing its acquisition of rival Diamond Offshore, said though its fleet will experience suboptimal utilization in the near term, a high level of tangible contract opportunities is expected to drive a backlog inflection sometime next year.
Seadrill boss Simon Johnson told investors recently that despite the near-term imbalance between available rigs and opportunities, the company remains resolute in its belief in the strength and durability of the offshore drilling industry and the contractor’s position within it.
Valaris President and Chief Executive Anton Dibowitz summed up it up this way to investors in November: “While we have seen some customer demand deferred, the outlook for 2026 and beyond remains robust.
