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Deepwater Rig Market to Stay in the Doldrums, According to ODS-Petrodata Report.

HOUSTON, Oct. 23 /PRNewswire/ -- An oversupply of deepwater drilling rigs will continue until at least 2007, and owners of these rigs will not be able to contract their rigs at rates previously expected, according to the latest edition of The Deepwater Rig Market Report, issued twice yearly by Houston- based ODS-Petrodata Consulting & Research.

After falling for two years, demand for deepwater rigs is expected to grow slowly over the next several years. However, with four new rigs poised to join the fleet in the next eighteen months, an excess of equipment will exist until at least 2007. Although utilization of the newest and best-equipped rigs will remain high, day rates for these units will be lower than was expected when they were built. Along with the impact on day rates for all deepwater units, older and less sophisticated deepwater rigs will bear the brunt of the extra capacity in terms of utilization.

"There is no doubt that the deepwater rig construction frenzy of the last few years was overdone," said Tom Kellock, a senior consultant in ODS- Petrodata's Consulting & Research practice and product manager for this report and its sister publication World Rig Forecast - Long Term Trends. "Now that the majority of the initial long-term contracts are drawing to a close, it is more readily apparent that the utilization rates of the past few years were artificially high, and that the underlying demand was more modest than it appeared."

The Deepwater Rig Market Report concludes that the enormous amount of work expected in West Africa to develop the steady string of major discoveries by the likes of ExxonMobil, ChevronTexaco, BP and Total will underpin the deepwater rig market. However, as oil and gas companies focus more on the bottom line and less on simply expanding reserves and production, rig owners will be under continuing pressure to keep day rates from rising substantially from today's levels.

Including almost 50 tables and charts, ODS-Petrodata's Deepwater Rig Market Report provides a wealth of information on global offshore deepwater rig activity, past, present and future. Forecasts of demand for deepwater floating rigs (semisubmersibles and drillships) extend out to the year 2010, while day rates are projected to the end of 2007. The report includes individual forecasts for each of the world's major deepwater drilling regions, the Gulf of Mexico, Brazil and West Africa. Deepwater activity in North West Europe, the Mediterranean and the Asia/Pacific region is also studied in the report's newest edition.

ODS-Petrodata's Deepwater Rig Market Report is available by annual subscription. For more information, contact Paul Large at 832-463-3061 or by email at plarge@ods-petrodata.com .

ODS-Petrodata has been a leading provider of market intelligence and data to the offshore oil and gas industry since 1974. ODS-Petrodata Consulting & Research's full range of capabilities is detailed on the web at: http://www.odsp-consulting.com/ .

CONTACT: Paul Large of ODS-Petrodata Consulting & Research, +1-832-463-3061, or plarge@ods-petrodata.com

Web site: http://www.odsp-consulting.com/
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Publication:PR Newswire
Date:Oct 23, 2003
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