Combined, the number of idle rigs will increase substantially in short order. COVID-19 is also impacting the ability to get personnel and equipment/services to and from rigs. Announcements of operators cutting 2020 capital expenditure plans are coming fast and furious with a 20-30% reduction typical. RigLogix has contacted a number of rig owners and operators and the consensus seems to be that it’s going to get worse before it gets better, especially if current conditions persist. With the oil price crash and COVID-19, the near-term outlook for the offshore rig market is on a lot of minds.

Africa, Southeast Asia, and the Middle East make up over 50% of the total Over $1.6 billion in contract value is at stake for options that are due to be exercised this year.

However, contract options are at most risk.

Contract scrutiny has already led to a few contract cancellations and the first claims of Force Majeure.

COVID-19 and low oil prices are already having an impact on the offshore rig market as contractors face crew & logistical challenges and E&Ps attempt to prioritize drilling campaigns.

Oil rig fallout 2