Monday June 15, 6:04 pm Eastern Time
Offshore drilling economics decline as oil drops
NEW YORK, June 15 (Reuters) - The economics of drilling for oil and natural gas declined for the first time since January
1997, according to drilling company Global Marine Inc's (GLM - news) monthly survey.
The survey showed that daily rates for drilling rigs dropped by 0.2 percentage points to 72.5 percent of the cost of constructing
a new rig from.
''The continuing weakness in oil prices is causing some oil and gas producers to reduce 1998 drilling plans,'' Global Marine
chief executive Bob Rose said.
He said that cancellation of contracts had resulted in competition between drilling contractors in the Gulf of Mexico shallow
water markets and that rates commanded by 300 foot jackup rigs had fallen $10,000-$15,000 per day from the peak level of
December 1997.
Activity continued strong in the North Sea, West Africa and Southeast Asia.
Dayrates for deeper water semisubmersible drilling rigs rose to 65.7 percent of construction costs from 65.3 percent a month
ago.
Shares of drilling companies fell sharply on Monday, hurt by a drop in the price of the international benchmark Brent blend to
$12.20 per barrel,
The S&P Oil Drilling Index dropped 3.37 percent to 3,889.59 points, with Global Marine, down 1-8/16, 7.52 percent, to
18-7/16, while Ensco International Inc (ESV - news) lost 1-14/16 to 17-11/16.
|
