Songa Offshore expects reduced rig demand in 2015

Songa Offshore expects reduced rig demand in 2015

ROGER JORDAN, Associate Editor

LIMASSOL, Cyprus -- Songa Offshore, a Cyprus-based drilling contractor, is expecting reduced demand in the Norwegian floater market next year.

Rig owners have been left feeling the pinch as a result of an overabundance of rigs, cost cutting by operators and falling oil prices.

“In line with the global drilling market, the NCS [Norwegian Continental Shelf] floater market has been soft in 2014 and a reduction in requirements are expected in 2015,” the company said in its third-quarter earning’s report.

“As a result of the dampened activity, there are several rigs that have left or are expected to exit the NCS in the near future,” the company added.

However, according to a company presentation, Songa is expecting demand to pick up again from the end of 2016.

Songa Offshore currently has three rigs -- Songa Dee, Songa Delta and Songa Trym -- under long-term contracts with Statoil. However, earlier this month, Statoil announced that it had suspended the Songa Trym, due to overcapacity in its rig portfolio, through 2014, a period which might be extended.
 
Songa also has four category D rigs -- Songa Equinox, Songa Endurance, Songa Encourage, Songa Enabler -- under construction, with deliveries scheduled to start in second-quarter 2015.  All of the rigs have long-term contracts with Statoil.

Earlier this year, the company sold two of its semisubmersibles – Songa Mercur and Songa Venus – to Opus Offshore.

The company reported third-quarter earnings before interest, tax, depreciation and amortization of $40.6 million.