William, it has been so long since i read that article that i forgot the second part. Did you read it? Here are a few snips:
... But oil-field equipment and supply companies contend the high rates are
justified. They're the classic outcome of a market in which demand is
outstripping supply, they say.
"We deal with people every day who profess sticker shock," said Russell
Luigs, chairman and chief executive officer at Global Marine, a Houston
offshore drilling contractor. "Have we had people try to negotiate an existing
rate down? No. What we would simply say is, if you don't wish to continue to
use the rig, then we'll go ahead and market the rig elsewhere. What has
happened in the last few months, is that the world has run out of surplus rig
capacity, at least offshore."
...
"You can't continue doing business at $3,500 a day," said Ken Tamblyn, chief
financial officer at Tidewater, quoting what was the average daily rental rate
for a supply boat two years ago.
Today New Orleans-based Tidewater, the leading contractor of marine
supply vessels in the Gulf of Mexico, is renting its supply boats at an average
rate of $8,500 per day.
"We haven't lost any jobs" because of rate increases, said Tamblyn, who
noted that they are a product of the current supply-demand situation. "Our
customers seem to understand that the industry needed higher day rates in
order to make this business make sense for the longer term."
...two years ago, jack-up rigs capable of drilling in shallow water
commanded rates between $12,000 and $15,000 per day. Floating
semisubmersible rigs able to drill in deeper waters went for between $40,000
and $50,000 per day. And the most advanced deepwater drilling rigs
commanded about $70,000 per day.
"Today the $70,000 is $210,000; the $40,000 is $160,000; and the $12,000
is now $75,000," Simmons said.
"If you didn't know anything, you'd say that's unfair," he said. But the reality,
he notes, is that oil companies desperately need the rigs to keep oil and gas
production -- and income -- flowing. Last year, "we used every rig in the
world ... onshore and offshore." |
