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Rig Dayrates and Utilization

  • Mark J. Kaiser
  • Brian F. Snyder
Chapter
Part of the Lecture Notes in Energy book series (LNEN, volume 8)

Abstract

The contract drilling market is characterized by three interrelated measures: utilization, dayrates, and fleet size. Utilization describes the proportion of rigs working to the available fleet at a specific time and place, while dayrates represent the average daily rental charged by rigs of a given class operating in a specific water depth category and region over a specific period. Contractors build rigs to generate cash flow and capture market share. Rig movements between regions are usually not rapid enough to create strong interregional correlations in dayrates and utilization. Rig demand is associated with oil prices which vary dramatically over time, and dayrates are highly variable. When rig supply exceeds demand, low prices result. We characterize global and regional supply, utilization and dayrate trends over the 2000–2010 period. The U.S. Gulf of Mexico was the least expensive jackup market during the decade, followed by the Persian Gulf, while the North Sea was the most expensive jackup market. The chapter concludes with a brief discussion of the contracts used in the industry and the primary customers in each regional market.

Keywords

Utilization Rate Fleet Size Contract Duration Lower Utilization Rate Deepwater Drilling 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag London 2013

Authors and Affiliations

  • Mark J. Kaiser
    • 1
  • Brian F. Snyder
    • 1
  1. 1.Center for Energy StudiesLouisiana State UniversityBaton RougeUSA

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