The number of active drilling rigs continues to belie the overall activity in the deepwater US Gulf of Mexico. Historically, it has been deepwater floating rig activity that has driven vessel demand but the current deepwater rig count currently stands at 19. This is striking because the price of oil has remained sustained above $80 / barrel going back to the beginning of 2022—whereas from 2017 through 2021 oil prices averaged $55 / bbl and the deepwater rig count averaged 18. With the increase in oil prices dating back to mid 2021, when prices were sustained over $65 / bbl, it was expected that there would be a meaningful increase in deepwater rig count. However, the rig count has not increased—yet deepwater activity is very robust with a strong demand for vessel support.
 
Though exploration drilling has remained flat, vessel demand is being driven by the use of platform rigs from production assets, work overs, and other various activities. Additionally, there are at least three major projects that are in development or close to coming online that are using existing infrastructure but still require significant vessel support. BP’s Argos platform and Shell’s Vito platform are currently driving strong vessel demand. Chevron’s Ballymore project, due to come online in 2025, will continue that trend.
 
Though global demand for deepwater rigs is rising, the demand in the Gulf of Mexico is flat. It remains to be seen if this trend will continue and I suspect that within the next several quarters there will be an increased rig demand which will drive additional vessel needs.