Shelf Drilling reports mixed contract fortunes as rig demand deteriorates further

UAE-based jackup rig operator Shelf Drilling has reported several new rig contracts in its latest fleet status report, while other contracts have suffered as Covid-19 continues to have a negative impact on offshore exploration activities.

Shelf Drilling Tenacious has secured a contract from Masirah Oil in Oman, commencing December with an initial firm term covering two wells, while Parameswara was awarded a contract by Adani in India commencing late November, for one firm well plus one optional well.

Following the suspension last month of the contract for Main Pass I, Saudi Aramco has suspended the contract for Main Pass IV while Eni has suspended operations of Key Singapore, which is currently on standby in Tunisia.

Additionally, the contract commencement of Shelf Drilling Enterprise with Chevron Thailand is expected to be delayed to late December due to Covid-19 related logistical challenges.

Shelf Drilling reported a net loss of $7.7m for the third quarter of this year, with revenues hit as a number of drilling contracts which were suspended, terminated or not extended as a result of the pandemic.

David Mullen, CEO of Shelf Drilling, commented: “As anticipated, rig demand has further deteriorated with additional pressure on utilisation and dayrates due to the ongoing market uncertainty. While we expect this situation to persist in the near to medium term, I am also convinced that our proactive steps taken to navigate this pandemic, combined with our best-in-class operating platform and established customer relationships will continue to differentiate us as the international jack-up contractor of choice.”

Shelf Drilling owns a fleet of 36 jackup rigs, and currently 30 rigs remain under contract.