Reply #2: There has been a shortage of rigs... [View All]

[rfranklin]

This is an article from 2006--

http://www.rigzone.com/news/article.asp?a_id=39366

Rental Fees Double

The Cajun Express is owned by Houston-based Transocean Inc., the world's biggest offshore driller. While record lease rates of as much as $520,000 a day are funding expansions by Transocean and other rig operators, shipyards from South Korea to Singapore to Scandinavia are backlogged with orders. Growth of the offshore drilling fleet will be gradual, says Kenneth Sill, a Houston- based analyst at Credit Suisse Securities USA LLC.

Daily rental fees on the most sophisticated and rugged drilling vessels are double 18 months ago, Sill says.

"Day rates have climbed aggressively because demand for these rigs far outweighs the ready supply,'' says Clayton Ballard, the top-ranking Transocean employee aboard Discoverer Deep Seas, another rig at the Tahiti field.

Worldwide, there are 31 rigs on order that will be able to handle deepwater projects such as Jack, according to Houston- based Rigzone, which compiles data on the drilling industry. Two are scheduled to be finished next year and 13 are slated for delivery in 2008