Fred. Olsen Energy, a Norwegian company owning drilling rigs, has said that floating rigs market continues to be challenging in all segments, with low tendering and contracting activity, further pressed by more newbuild units entering the market.

In its presentation today, the company has revealed a graph showing that the number of active floaters in the world today, outweighs the current demand.

“The imbalance between demand and supply is expected to prevail through 2015 and into 2016,” the company said in a statement.

It also pointed out to the fact that increased stacking and scrapping is materializing. The companies usually stack their drilling units when they feel a rig will have tough time obtaining new work soon. By cold stacking a rig, the companies cut costs needed for the rig to remain operational.

First quarter profit rises

In its first quarter, Fred. Olsen Energy reported revenues of $284 million vs 278 million a year ago, and net profit of 69.7 million, versus 23.5 million a year ago.

Providing the outlook for the Norwegian floater market, where it operates three rigs, the company has revealed the situation is not rosy.

Fred. Olsen Energy has said that several floaters in Norway will come off contract during 2015, including its Bredford Dolphin semi-submersible drilling rig. The rig has a contract with an AGR consortium, ending at the end of the third quarter this year.

“Contract renewal will be challenging and increased idle time is expected,” Fred. Olsen said in its presentation.

Elsewhere, in Mozambique, the company has received an early termination notice for the Belford Dolphin drillship, drilling for Anadarko in Mozambique. The contract will end in early September

Also, in the UK, the contract with BG for the Borgholm Dolphin accommodation unit, expires in May.

Source: www.reuters.com

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