Matthew Rigdon, Executive VP and COO

Previously, I expressed my optimism in a recovering deepwater Gulf of Mexico with anticipated increased rig activity likely in 2022. There are additional factors to consider (outside of the US GOM) that can also have positive impacts on the US GOM deepwater market over the next several quarters.

The level of activity in Guyana and Suriname is continuing to increase. What was, just a few years ago, a speculative deepwater play is now turning into the most promising offshore oil and gas basin in the world. There are now seven deepwater rigs operating between the two countries, nearly 50% of the current activity in the US GOM. This is notable because the supply demands for drilling are identical to that of the US GOM, with the major driver being liquid mud requirements. For this reason, vessels with very large deadweight and liquid mud capacity are preferred for drilling support in that region. Historically, only US companies have built vessels with liquid mud capacities over 15,000 bbl. Even the largest vessels built in Europe rarely have more than 8,000 bbl of liquid mud capacity. Because of the shallow water depths and more shallow wells in Northwest Europe, the vessels built there have not required very large liquid mud capacities.

With activity in Suriname and Guyana continuing to thrive, the preference for US deepwater vessels to support their drilling activity will continue. As vessel supply is drawn away from the US GOM, there will be improving market dynamics in the US.

As the industry recovers from the recent arctic blast, I’m keeping my eyes on South America and its effect on our market.