The offshore drilling industry has experienced notable fluctuations in jackup rig utilization rates over recent years. As of January 2025, the global active jackup rig count stood at 380 units, marking a decrease of five rigs compared to December 2024. This decline was primarily attributed to reduced activity in Mexico, where multiple temporary suspensions occurred due to Pemex’s debt and payment challenges.
In November 2024, the worldwide marketed utilization rate for offshore rigs averaged 90.1%. South America led with a 100% utilization rate, indicating all available rigs were under contract. Other regions, however, experienced decreases in utilization throughout 2024.
Projections for the offshore jackup rig market suggest a period of adjustment and potential growth:
• 2025: The global jackup rig count is expected to decrease to 405 units by the end of 2025, down from 417 in 2024. Consequently, utilization rates are anticipated to decline from 94% to 89%.
• 2026-2028: While specific annual figures are limited, trends indicate a potential rebound in utilization rates. Factors influencing this outlook include:
• Increased Offshore Capital Expenditure: Forecasts predict a 50% increase in offshore oil and gas capital expenditure in 2025, reaching approximately $123.1 billion. This surge is expected to drive demand for offshore support vessels (OSVs) and rigs, particularly in regions like Brazil, West Africa, and the Middle East.
• Regional Developments: In Africa, countries such as Nigeria, Angola, Ivory Coast, and Ghana are anticipated to initiate multiple drilling programs, each averaging around 12 months. These initiatives could bolster jackup rig demand in the region.
Several factors are poised to influence jackup rig utilization rates in the coming years:
• Equipment and FPSO Delays: The offshore rig market faced challenges in 2024 due to equipment and Floating Production Storage and Offloading (FPSO) delays, coupled with political uncertainties. These issues led to a deceleration in market activities, underscoring the need for improved supply chain efficiencies.
• Day Rate Trends: While there was a notable increase in day rates for ultra-deepwater rigs in 2024, the jackup segment experienced some softness in day rates. This trend may impact the financial viability of certain projects and influence future contracting decisions.
• Market Corrections: Analysts anticipate that 2025 will be a year of market corrections, with potential slowdowns in rig demand and downward pressure on day rates. This period may serve as an adjustment phase following previous upcycles.
The offshore jackup rig market is navigating a complex landscape characterized by regional disparities, evolving demand patterns, and economic fluctuations. While short-term forecasts suggest a slight decline in utilization rates, increased capital investments and new project developments offer a cautiously optimistic outlook for the latter part of the decade. Stakeholders should remain attentive to geopolitical developments, technological advancements, and market corrections that could influence the trajectory of jackup rig utilization in the coming years.
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