Rolf Bjorne, managing partner of broker Fearnley Offshore, said today that the drilling market is desperately in need of idle or dismantling drills due to a much larger supply of drilling vessels (shipyard shipments) than drilling demand.

Fearnley Offshore said the dismantling of the drilling vessel was the only way to help the fleet utilization rate increase drastically, and the drilling market's performance was a major factor in determining the demand for a marine support vessel (OSV).

Oil companies' spending cuts have brought increasing pressure to the offshore drilling market, which is under pressure as oil prices continue to fall. Drilling fleet supply significantly increased, while the market demand has continued to decline. By the end of 2015, Fearnley expects the number of drilling rigs not contracted to increase from the current 59 to 90.

Fearnley Offshore data show that this year there will be 24 new drilling vessel delivery operations, of which 41% of the new ship has not yet signed a charter party; jack-up drilling platform (shipyard shipyard) delivery this year will reach 55, of which 92 % Of the drilling platform did not finalize the lease.

Fearnley Offshore conducted a survey of existing leases, alternative leases, drilling requirements and possible drilling operations. Based on the survey results, Fearnley Offshore expects the number of active drilling vessels to reach 260 to 275 on the market this year, while market demand will drop to 210 to 215.

In his view, the only way to save the drilling market is to increase the amount of dismantling, the drilling contractor must dismantle or idle more drilling ships, Bjorne said. He believes that idle drilling rigs also need a lot of cost per day, an idle ultra-deepwater drilling rig daily minimum cost of about $ 100,000 to $ 120,000, which will stimulate the contractor dismantling drilling vessels.

Fearnley Offshore said that at present, drilling rig rental has been a substantial decline. In 2013, daily rents were as high as $ 650,000, while rents have fallen to around $ 400,000 under currently issued charter contracts; however, actual daily rents are still lower, at about $ 300,000 to $ 350,000.

Bjorne said that despite the current overall market weakness, but there are some remarkable points, such as drilling contractors in the signing of the charter contract to show a high degree of creativity. For example, drilling contractors are willing to cut the daily rent of a drilling vessel if the oil company agrees to pack some of the unused drilling rigs in other areas.