(corrects headline to say dip could last further 18-24 months,
not until 2018)
By Balazs Koranyi
OSLO May 22 The global offshore drilling
market's dip could be longer than previously expected and
charter rates could take until 2017 or 2018 to recover to last
year's levels, the head of Maersk Drilling said on Thursday.
Oil groups continue to delay projects to save cash and rig
rates will fall further just as a slew of new vessels ordered
during the boom years start to hit the water, said Claus
Hemmingsen, the CEO of Maersk Drilling, part of Danish shipping
conglomerate A.P. Moller-Maersk.
"With every quarter that goes by with next to no new
projects sanctioned and next to no new deepwater rigs
contracted, the recovery is pushed out a little bit," Hemmingsen
Analysts at Barclays say that 13 newly built floating rigs
due to enter the market this year are still without contracts.
Hemmingsen now expects the market dip to last a further
18-24 months, having predicted in the previous quarter that it
would last 12-18 months, and sees charter rates hitting the
bottom over the next several months.
His comments match forecasts by rig firm Fred Olsen
, which has said it expects tough times for the sector
for at least another two years.
Hemmingsen added that charter rates, which peaked at about
$650,000 a day for top of the line ultradeep water units last
year, would fall to $500,000 a day or even lower in some cases.
"But if you look at the long term requirements for deepwater
drilling, the rigs available and the order backlog, then by 2017
or 2018 I would expect rates close to being on par with what you
saw in 2013," Hemmingsen said. "The projects are there and the
economy is gradually picking up."
Maersk Drilling, like many of its global peers, has
struggled to pick up new contracts this year and its order
backlog shrank to $7.4 billion at the end of the first quarter
from $7.9 billion at the end of last year.
However, Maersk needs more vessels to meet its long term
growth targets and despite the industry's dip, Hemmingsen would
not rule our further orders.
"We will still have an interest to grow Maersk Drilling to a
bigger size than where we are today ... and I would still have
the appetite to order a couple of rigs within the next 12
months," he said.
Maersk operates more than 30 drilling rigs and barges.
(Editing by David Goodman)