Transocean's backlog booms to $9.2 billion on the back of multiple rig deals - Upstream Online

Transocean’s backlog booms to $9.2 billion on the back of multiple rig deals | Upstream Online

Deep-water drilling giant Transocean said its backlog has risen by $1.2 billion during the last quarter and now stands at $9.2 billion, led by multiple rig deals.

Transocean revealed the incremental backlog in its quarterly fleet status report this week and said multiple rig contracts and options were finalised during the second quarter.

“The aggregate incremental backlog associated with these fixtures is approximately $1.2 billion. As of 19 July 2023, the company’s total backlog is approximately $9.2 billion,” it said.

Transocean earlier this week said it had secured a multi-year contract on the Mexican side of the Gulf of Mexico for one of its drillships at a dayrate that averages about $479,000.

One of its three drillships will be selected for the job — the Deepwater Invictus, Deepwater Thalassa or Deepwater Proteus — no later than one year before the earliest date in the start window, it noted.

The client was unnamed but multiple reports have tipped Woodside Energy, which is developing the mighty Trion oilfield.

In addition, Transocean has landed contracts for its specialised rigs — the Transocean Equinox, Transocean Endurance, Transocean Barents, Transocean Encourage and Transocean Norge — which also includes multiple options.

Assuming all contract options are exercised, the potential incremental backlog associated with the contract options is approximately $480 million to $500 million, the company added.

Potential rig boom

Drilling contractors expect markets across the globe to continue improving this year as the outlook for the rig industry remains positive, with increased upstream investments leading to higher contracting activity across floaters and jack-ups.

Offshore exploration and production spending is projected to increase by about 15% in 2023 with further growth forecasted in 2024 and 2025, which may potentially push dayrates for deep-water drillships to above the $500,000 threshold.

“Drillship demand is anticipated to rise throughout 2023 and we believe that, as a result, dayrates will continue to trend upwards, especially for the higher specification ultra-deepwater [units],” Transocean chief executive Jeremy Thigpen told investors in a recent conference call.

“By the end of the year, we expect leading-edge rates to exceed $500,000,” he said, adding utilisation rates for sixth and seventh-generation drillships remain at nearly 100%.

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