Falling oil prices have hit Maersk Drilling hard – The Post

Falling oil prices have hit Maersk Drilling hard

Maersk’s deep-sea oil exploration arm could risk having three expensive drilling vessels lying idle

Tumbling oil prices are forcing Maersk to take vessels out of service (photo: Strategic Petroleum Reserve (United States)
May 22nd, 2017 12:21 pm| by Stephen Gadd
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At the end of June, the contract for the drilling vessel ‘Maersk Viking’ will expire, at which point there is every likelihood the vessel will end up lying idle, along with her sister ships ‘Maersk Venturer’ and ‘Maersk Valiant’.

Maersk Drilling has four ships that are all highly technically-advanced and can operate at depths of up to 3.6 km.

READ ALSO: Maersk cuts over 100 jobs from its oil production

The three idle ships together have a combined new-build price of 9 billion kroner, Søfart reports.

Maybe the end in the US
Maersk Viking has been operating in the Mexican Gulf under contract to ExxonMobil since 2014. If the contract is not renewed, it means the end of Maersk’s drilling operations in the United Sates.

“We are working to market ‘Maersk Viking’ to potential customers, just as we do with the other vessels in our fleet that are idle on the market,” Jørn Madsen, the administrative director of Maersk Drilling, told Søfart.

“Even though oil companies are holding back when it comes to deep-water exploration projects, there are still projects under development.”

Ready to roll when the market picks up
Madsen points out all the vessels are ‘warm stacked’, which means they can be reactivated at short notice if a contract is signed.

However, the market segment for deep drilling is sluggish at present. When the first ship was ordered in 2011, oil prices were stable at between 100 and 200 dollars per barrel. At the moment, the price is just over 50 dollars per barrel.