Shipyards are going full tilt to fill orders to make up the deficit in the international rig fleet, but there seems to be no near-term solution in sight that will resolve the worldwide shortage.

Industry analysts agree that the demand for mobile offshore drilling units will continue to grow over the next year. According to ODS-Petrodata, the demand for jackups, semisubmersibles, and drillships will exceed supply during the summer and fall. Though this news is not surprising, it will have considerable knock-on effects. Without an adequate fleet of drilling rigs, many drilling programs will have to be postponed.

Although 38 new rigs are to be delivered this year alone, their arrival will not make up for the supply shortfall in 2008. And the situation isn’t likely to improve any time soon. There are more than 80 jackups under construction right now, as well as a large number of semisubmersibles and drillships. But even with huge numbers of newbuilds on the books, demand for drilling rigs continues to outpace supply in many areas of the world.

Production systems are in the same boat, so to speak. Douglas-Westwood Ltd.’s “World Floating Production Market Report 2008-2012” speculates that in 2008 alone, more than US $8 billion in capital expenditures will go to floating systems — FPSOs, floating production systems, tension-leg platforms, and spars. And still, projects are slipping.

Rig sharing

The rig shortage is leading operators to be creative. When they can, they are signing long-term contracts and are organizing their drilling programs around the rigs they are able to secure. In other cases, operators are sharing resources.

Rig sharing, which was uncommon a couple of years ago, is becoming a necessity, particularly in areas that require rigs with high-spec capabilities.

StatoilHydro, which is about to drill its first prospect as operator offshore Newfoundland and Labrador, entered into a rig-sharing agreement in early March with Husky Energy and Petro-Canada. All three operators will use Transocean’s Henry Goodrich, a semisubmersible rated for a drilling depth of 2,000 ft (610 m), to carry out drilling programs in Atlantic Canada, a relatively underexplored harsh-environment region.

StatoilHydro will use the semisubmersible to drill its Mizzen prospect in exploration license EL 1049 in the deepwater Flemish Pass Basin east of the Grand Banks.

Husky will use the Henry Goodrich and the GSF Grand Banks for which it has a three-year contract, to drill infill producers and injectors to enhance production at the White Rose field in the Jeanne d’Arc Basin and to progress the White Rose Satellite developments including North Amethyst and West White Rose. The Henry Goodrich is also scheduled to drill a well for Husky in the neighboring Terra Nova field late this year or early in 2009. Petro-Canada is a partner in both of these projects.

This cooperative approach is one that will give E&P companies whose individual project budgets can’t support drilling costs at the current day rates a way of securing drilling services at a reasonable price. And in this case offshore Newfoundland, it is allowing three reasonably sized operators to drill an area where their separate limited drilling programs could have made the effort cost prohibitive.

If analysts are correct in their assessment that the increasing rig fleet will not be able to keep pace with drilling demand, the industry will see more innovative partnering and perhaps even more creative solutions in the near future.