Uaru FID among major projects pushing 2023 rig contracting activity

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The latest Offshore Rig Market Snapshot from Evercore ISI – a US-based economic research firm – notes a positive uptick in deepwater drilling rig contracting activity this year driven by recently sanctioned projects. 

Guyana’s fifth development – Uaru is on the list. 

“We count three deepwater final investment decisions (FIDs) year-to-date: Shell’s Dover tieback in the United States Gulf of Mexico, ExxonMobil’s Uaru project offshore Guyana, and Equinor’s MB-C-33 development offshore Brazil,” the report noted. “Overall offshore rig contracting activity remains light with 26 new contracts and options announced thus far in May.” 

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According to Evercore, those projects led to several major term contracts for drillships; Shell’s five-year contract for the newbuild Stena Evolution and Exxon’s award of 6.3 years of additional backlog to three Noble drillships. There is also Equinor’s outstanding rig tender for MB-33. It also handed a major iEPCI contract to Technip FMC for the entire subsea system as well as life-of-field services.

Additionally, Petrobras recently awarded Noble a 2.5-year contract for the Noble Faye Kozack for the BM-S-11 and Tupi fields offshore Brazil.

Looking ahead, Evercore said that  “with both floaters and jack-ups averaging near 90% marketed utilisation, we expect contracting activity to remain light for the foreseeable future.”

On the flipside, deepwater FIDs this year will continue to rise, falling in line with predictions by Wood Mackenzie. Back in April WoodMac said 30 out of the viable 40+ developments are expected to reach FID.

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