abc3 January 2024Global Research and Evidence LabChina Oil, Gas and Chemical Oilfield services: Offshore rigs' utilisation edged up MoM in December Offshore rigs' utilisation and dayrates rose slightly MoM in DecPer Riglogix data, the total number of offshore rigs rose by one MoM in December, with an uptick in utilisation and dayrates from November. By rig type, jackups/semisubs/drillships saw their utilisation up 7.2ppt/5.1ppt/1.5ppt in 2023. In Q423, utilisation for jackups/drillships stayed above 75%/70%, while hovering around 60% for semisubs. In December, dayrates for newly-signed contracts hit US$452,000 for semisubs, the highest in 2023; whilst declining 6-12% MoM for jackups/drillships. UBS sees the Brent oil price averaging US$82/bbl in 2024. In this backdrop of elevated oil prices, upstream firms could continue to step up capex. We prefer COSL-H and Jereh.Rig activity: Global utilisation up 0.6ppt MoM in DecPer Riglogix data, jackup utilisation continued to rise in December, at 78.8%, up 1.0ppt from November and 7.2ppt YoY. Semisub utilisation edged down 0.2ppt MoM to 62.2% in December, while climbing 5.1ppt YoY. Drillship utilisation declined 0.5ppt MoM to 73.0% in December, while gaining 1.5ppt YoY. Overall, global rig utilisation went up 0.6ppt MoM to 75.7% in December.Rig dayrates: slightly up MoM in Dec; dayrates for newly-signed contracts rose for semisubsPer Riglogix data, rig dayrates rose 1.0% MoM and 15% YoY in December, with an MoM increase of 1.7% for jackups, 0.6% for semisubs and 0.9% for drillships. For newly-signed contracts in particular, jackups witnessed an 11.5% MoM drop in dayrates to US$122,000 and drillships a 6.7% fall to US$437,000, while semisubs saw a 41.2% jump to US$452,000.Global offshore rig count up by one MoM in DecThe total number of rigs was one more in December than in November, as a result of one more drillship and unchanged semisub and jackup numbers. Our forecast of deliveries by end-2024: 14 jackups (or 2.8% of the total number then), two semisubs (2.1%), and eight drillships (8.1%).Figure 1: Global rig utilisation20%30%40%50%60%70%80%90%100%Dec-11Dec-13Dec-15Dec-17Dec-19Dec-21Dec-23Jack-upsSemi-subsDrillshipsSource: RiglogixFigure 2: Changes in global rig dayrates - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 - 100,000 200,000 300,000 400,000 500,000 600,000Dec-08Dec-11Dec-14Dec-17Dec-20Dec-23Semi-subsDrillshipsJack-ups (RHS)US$US$Source: RiglogixThis report has been prepared by UBS Securities Co. Limited. This is a translation of a Chinese research note published by UBS Securities Co Ltd on the same date. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 4. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a c...
