Demand bottomed in end-2016, where there were only 12 units employed (41% utilisation). If two additional aged rigs are scrapped, and if the delivery of the shipyards’ four abandoned TDRs is deferred for several years, the global TDR fleet may not see any net fleet growth for the rest of this decade.“Better jack-up (JU) utilisation rates may benefit the TDR market. JU utilisation rates have recovered from a low of 63% in February 2017 to 67% in February 2018, although the charter rates have not budged from their lows given the still large oversupply.“Clarksons is forecasting utilisation rates to rise from 66% at end-2017, to 71% at end-2018F and 74% at end-2019F. This is on the back of expected higher levels of offshore oil and gas production. If JU utilisation rates tighten sufficiently, the effects of the tighter JU market may spill over into demand for TDRs,” said CIMB Research.

Source: The Star April 09, 2018 00:22 UTC