Rig rates down for Transocean

Switzerland’s offshore drilling contractor Transocean has seen two of its contracts extended. Both contracts have been negotiated for a reduced day rate, in what is a sign of a slowdown in upstream activity and the ensuing supply glut threatening the drilling rig sector.

India’s Reliance Industries has signed a three-month extension for the drillship Dhirubhai Deepwater KG2 for a day rate of $295,000, marking a discount of $100,000 from the previous agreement. The new contract will expire in October.

The second contract concerns the semi-submersible drillship Transocean Barents, which Shell has kept on for one more well at its operations in the Norwegian North Sea. The new day rate is fixed at $547,000, down from a previous $574,000. The super-major is likely to have received a larger discount had the extension period been longer – it is expected to expire in September.

The total value of the new contracts is around $35 million. Transocean also announced five of its rigs (Sedco Express, GSF Rig 135, Actinia, Transocean Searcher and Transocean Prospect) are idle.