Jeremy Thigpen, Transocean CEO said that the company has secured a contract, subject to a final investment decision by its customers, that will result in upgrading Deepwater Atlas into the industry&rsquo s second 20,000 PSI ultra-deepwater drillship. This contract is meaningful as it moves us closer towards securing backlog for our remaining newbuild drillship, and clearly demonstrates our customer&rsquo s confidence in Transocean as the undisputed leader in ultra-deepwater drilling.&rdquo
U.S. oil explorer LLOG has chartered a Transocean drilling rig for the drilling of wells at the Shenandoah project in the Gulf of Mexico.
According to the Norwegian broker Bassoe Offshore, the campaign is expected to last for around 17 months and Transocean will deploy one of its new 20K BOP drillships for the work.
LLOG operates the Shenandoah discovery, located in the deepwater Gulf of Mexico, around 200 miles south of New Orleans.
The 3,000,000 lbs hookload Jurong Espadon drillship is currently under construction at Sembcorp Marine Jurong Shipyard in Singapore. The unit is expected to be delivered by the end of Q2 2020. Bassoe has estimated the day rate for a 20K BOP rig to be around $480,000.
(Source: Transocean/Bassoe Offshore)

Offshore drillers have been dealt a tough hand amid the COVID-19 pandemic and oil price downturn. However, contractors can put themselves in a position to not only survive the downturn but thrive in its aftermath, said  Jeremy Thigpen, President and CEO of  Transocean. In a keynote address given during the 2020 IADC World Drilling Conference on 9 December, he outlined the steps his company has taken to prepare for an eventual recovery.

One of those steps, the maintenance of a young, valuable fleet of rigs, has been long in the making. After the previous downturn started in 2014, Transocean already committed to transforming its fleet, Mr Thigpen said. The company has since scrapped 59 floaters and completely exited the jackup market to focus on high-specification ultra-deepwater and harsh-environment floaters.

The average age of Transocean&rsquo s floaters has dropped from around 21 years in January 2014 to just nine years in December 2020. Further, ultra-deepwater and harsh-environment floaters make up 100% of its fleet today, as opposed to 45% of its fleet in January 2014. The company is also spending $2.25 billion on a pair of 20,000-psi drillships, the Deepwater Titan and Deepwater Atlas, which are expected to be delivered in 2021.

Mr Thigpen described the company&rsquo s younger assets as &ldquo far safer, far more reliable and far more efficient&rdquo than its legacy fleet, and the the company is hoping to take advantage of expected increases in near-term floater demand.. Citing offshore rig statistics from Rystad Energy, he noted that global floater demand saw a significant drop in the immediate aftermath of the previous oil price downturn, with year-on-year demand decreasing by 14% in 2015, 30% in 2016 and 23% in 2017. Rig demand saw modest year-on-year growth in 2018 and 2019 before falling again in the wake of the current downturn. Rystad estimated that the floater market in 2020 will decline by 14% from 2019 levels before bottoming out in 2021.

After 2021, floater demand is expected to increase, with Rystad forecasting double-digit positive year-on-year growth in 2022, 2024 and 2025, while 2023 is estimated to see a 4% increase. Mr Thigpen said Transocean has positioned itself to take advantage of that future.