Diamond Offshore sees drillship rents almost doubling next year

By David Wethe and Alix Steel on 2/27/2019
Ocean Blackhawk. Photo: Marine Traffic A. Zamogylni.

HOUSTON (Bloomberg) -- Diamond Offshore Drilling Inc. said it’s nearly doubling rental rates for deepwater drillships as oil explorers return to sea.

The increase involves long-term rig leases beginning in 2020 and beyond, CEO Marc Edwards said Wednesday in an interview on Bloomberg TV. The proliferation of onshore shale drilling in the past decade shattered the deepwater drilling industry and prompted some rig operators to scrap vessels that cost hundreds of millions to build.

“Dayrates have collapsed down to about 25% of where they were at the last peak,” Edwards said. “We need to at least see them double and perhaps go even higher than that so that we can get back into the space whereby we are providing the correct returns to our shareholders.”’

It’s a rig-price recovery that Transocean Ltd., the world’s biggest owner of offshore rigs, pointed to last year. CEO Jeremy Thigpen has said rates for the most rugged vessels doubled in less than a year.

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