• 3 days Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO
  • 10 minutes America Could Go Fully Electric Right Now
  • 5 days Majors Oil COs diversify into Renewables ? What synergies forget have with Solar Panels and Wind Tirbines ? None !
  • 41 mins Rethinking election outcomes for oil.
  • 4 hours The Leslie Stahl/60 Minutes Interview with President Trump
  • 12 hours China leaders meet to discuss proposed 5 year economic plan.
  • 23 hours Clean Energy Is Canceling Gas Plants
  • 15 hours The City of Sturgis Update on the Motorcycle Rally held there, and the MSM's reporting hence
  • 27 mins Australia’s Commodities Heartland Set for Major Hydrogen Plant
  • 17 hours Saudi Oil Minister Abdulaziz said getting rid of oil "Far Fetched and Unrealistic". . True. . . but
  • 35 mins Video Evidence that the CCP controls Joe Biden
  • 2 hours Biden calls President Trump George . . . He confused Trump with George Bush. Folks this is scary.
  • 15 hours Irina Slav has a good article - Regarding Investors & Oil
  • 17 hours America's Frontline Doctors - Safely Start Living Again!
  • 18 hours Conoco Pledges ‘Net-Zero’ Emissions in Break With U.S. Rivals
  • 2 days OP article : "Trump blasts Biden Fracking Plan . . . "
  • 2 days GAME CHANGER: MIT Startup Commonwealth Fusion says Commercial Product by early 2030s ! THIS CHANGES EVERYTHING..
  • 2 days Biden denies fracking ban
Global Oil Production Costs Continue To Fall

Global Oil Production Costs Continue To Fall

A comprehensive Rystad Energy analysis…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Offshore Sector Reeling After Historic 300% Oil Price Crash

The offshore drilling market is set to be one of the worst-hit in the oil price crash and demand collapse, as companies are reassessing drilling programs and canceling or halting offshore contracts, IHS Markit said in its latest Offshore Marine Monthly analysis on Monday.  

Demand for offshore supply vessels (OSV) is expected to take a hit in the coming months, as exploration and production (E&P) companies, big and small, rushed to cut capital expenditures (capex) following the double whammy of the oil price crash and the coronavirus pandemic, Richard Sanchez, Senior Marine Analyst at IHS Markit, said on Monday.

“E&P companies operating in the US Gulf have been historically quick to respond to falling oil prices. As offshore drilling rigs are idled and contracts are terminated early, excess capacity in the OSV spot market will grow, which puts downward pressure on day rates,” Sanchez added.

According to IHS Markit, more offshore drilling programs will be deferred, halted, or even outright canceled in the coming months amid the unprecedented global oil glut.  

Westwood Global Energy Group also believes that the offshore drilling market faces tough times ahead. A month ago, Terry Childs, Head of Westwood’s RigLogix offshore rig intelligence service, said that “the number of idle rigs will increase substantially in short order.”

“Assuming low oil prices and COVID-19 continue in the coming months, the number of rigs going idle will be a key metric. Contracts where options are not exercised, delays to currently planned programs, and Force Majeure declarations and other contract termination options will all result in idle rigs.”

The price crash could lead to companies deferring as much as $131 billion worth of oil and gas projects slated for approval in 2020, Rystad Energy said in March.

Earlier this month, Rystad Energy said in an impact analysis that offshore drillers would see up to 10 percent of their contract volumes canceled this year and next, representing a combined loss of revenue of about $3 billion. According to the independent energy research firm, even the big offshore drillers could face financial challenges and may need restructuring.

“Now, in the infancy of a new downturn, a market that was only beginning to return to a healthy level of contracting activity, contract volumes and dayrates has seen its hopes crushed,” said Rystad Energy’s Head of Offshore Rig Market Services Oddmund Føre.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News