Global Drillship Market Report

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2014
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Executive Summary
A drillship is a merchant vessel designed for use in exploratory offshore drilling of new oil and gas wells or for scientific drilling
purposes. In most recent years, the vessels are used in deepwater and ultra-deepwater applications, equipped with the latest and
most advanced dynamic positioning systems. A drill ship is a particular type of mobile offshore drilling unit (MODU) that is
composed of a ship with a drilling rig on its top deck. These ships can go right to the drill site.
Deepwater exploration and drilling have shown a remarkable increase over the past few years. This is due in part to the
development of new technologies which have reduced operational costs and risks, as well as the finding of reservoirs that will
produce high production wells. Factors like growing oil demand due to rising population rates, increasing E&P expenditures, and
improving worldwide economic conditions are boosting the growth in drillship market. Despite the existence of various growth
drivers, there are certain challenges faced by the industry including environmental concerns, offshore accidents, and depletion of
oil reserves which can potentially hinder the growth of the industry. The year 2013 witnessed slowdown in orders for drillships due
to the uncertain outlook for oil prices and inventory of unchartered vessels from previous orders.
The report, Global Drillship Market analyzes the development of the respective market, with a focus on regions including the
Brazil, West Africa and the US GOM as these areas has long been considered part of the Golden Triangle for deepwater drilling.
The major trends, growth drivers as well as issues being faced by the industry are being presented in this report.
The industry is predominated by a handful of players including Samsung Heavy, Hyundai Heavy and DSME. These are Koreas
big three shipbuilders and have an oligolopoly in the offshore platform segment, especially drillships, due to their competitive
advantages like infrastructure; track record with international oil companies; and technological capabilities. The profiles of these
leading players are also included in the report along with their key financials and strategies for growth.
By combining SPSS Inc.s data integration and analysis capabilities with our relevant findings, we have predicted the future
growth of the industry. We employed various significant variables that have an impact on this industry and created regression
models with SPSS Base to determine the future direction of the industry. Before deploying the regression model, the relationship
between several independent or predictor variables and the dependent variable was analyzed using standard SPSS output,
including charts, tables and tests.

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A drillship is a particular type of mobile offshore drilling unit (MODU) that is composed of a ship with a
drilling rig on its top deck.
Drillships account for a signicant portion of offshore
assets on order and have fourth largest global rig fleet
(%) as of 2013.
Driven by deepwater activity and demand for high-
specification assets, the number of active drillships in the
offshore drilling fleet has more than doubled in past
decade, from operating units in 2004 to units in
2013.
As many as new drillship orders worth nearly US$...
billion were placed in 2013 as compared to orders
worth US$... billion in 2012, marking a decline of %.
The global drillship market has been able to absorb
new build deliveries in 2013.
Global Drillship Order by Volume (2004-2013)
Drillship Market by Fleet Size (2004-2013)
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Global Drillship Delivery Trend (2004-2013)
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Areas like Brazil, West Africa and the US GOM has long been considered part of the Golden Triangle for
deepwater drilling.
There were drillships in Brazil as of 2013 against rigs
in 2012. During 2012, the number increased to as
compared to only drillships in 2011. The staggering
increase in number of drillships in 2012 was due to
growing oil reserves and increasing operational shipyards
in the country.
West Africa is one of the largest markets for drillships,
having drillships as of 2013 as compared to in 2012.
The US Gulf of Mexico has a fleet of drillships as of
2013 as compared to drillships in 2012.
The worldwide drillship utilization has increased to % as
compared to % a year ago. Highest utilization is
observed in North Sea and Brazil. The utilization is highest
(..%) for drillships with rated water depth of 6000-7999 ft.
Drillships in West Africa (2008-2013)
Drillships in Brazil (2008-2013)
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Drillships in US GOM (2008-2013)
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The expected growth in drillship rig market is attributed to the recovering global economy, coupled with
the rising world population which will not only increase worldwide energy consumption but also the
demand..
The global drillship rigs fleet was . units in 2013 and the forecast is indicating an additional . units in the drillship fleet by the
end of 2017.
World Population has a high correlation with the demand for the global drillships as rise in the world population results in increase
in energy demand. The increase in the energy demand drives the energy prices upwards which results in increase in the
deepwater production and exploration activity. Thus, overall impact is an increase in the demand for drillships.
Global Deepwater expenditure has a high correlation with the global drillship market. The increase in the global deepwater
expenditure results in increase in demand for drillships which acts as platform for the exploration and production activity. A rise in
demand for drillships globally will increase the drillship day rate resulting in overall industry growth.
Global oil demand has a high correlation with the demand for the global drillship market as increase in the demand for oil results in
increase in the demand for the drillship due to increase in production & exploration activity. Also, increase in oil consumption
results in higher crude oil prices which makes offshore oil exploration and production more feasible.
Global Drillship Market Forecast (2013-20147F)
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