Shale won't replace deepwater, but offshore industry must reenqineer value chain to reach economic parity with onshore

摘要

We noticed signs of weakness and a relative lack of contract availability as early as Q2 or Q3 of 2014. The ultra deepwater-focused companies were already considering how deepwater economics were challenged at $75-$80 per barrel price. As a result, we had seen a lot of our clients take a pause in exploration activity, but obviously, it's gotten worse since 2014. We are still in the middle of a pretty substantial newbuild cycle. I think we knew, as an industry, that we were going to deliver more rigs than were needed, although a number of these rigs were expected to be replacements for older rigs that needed to be retired. However, we probably didn't anticipate the surplus to be quite as large as it became. And when the market declines as it has now, it becomes that much harder for contractors to retire old assets if companies are making any kind of margin with them.