Analyst expects rig death in North Sea

Rig, Rogaland petroleum taxOil rig. Photo:

The level of unemployment for people working at rigs in the oil sector will continue to rise, and many of the rigs that become vacant will probably not return,  Nordea Markets think.

– Things are going to be absolutely terrible in the North Sea over the next few years. We believe that the demand will fall, which will lead to considerably more rigs becoming vacant,  oil analyst Janne kvernland in Nordea Markets said to Finansavisen.

In addition to suspensions and cancellations, the several rigs will soon be at the end of their contracts. According to the report from Nordea 13 floating drilling rigs  will have completed their contracts on the Norwegian continental shelf before the New Year, and several of the oldest rigs may never get any drill assignments again.

– To reactivate a rig that is 30 years old is riskier than to reactivate one that is 10 years old, and we expect massive rig death in the North Sea.

In the Norwegian sector, more than 40 percent of the floating drilling rigs are over 20 years old, and in the UK the amount is 90 percent. Kvernland estimates that 14 rigs on the Norwegian shelf are likely to be removed.


Source: NTB scanpix / Norway Today