Gulf of Mexico deep-water rigs likely to reach record by 2014

The offshore rig count in the Gulf of Mexico is nearing its pre-Macondo level and is expect to grow another 50 percent by 2014, one of the most visible indicators of the Gulf drilling revival, according a Monday research note by Barclays Equity Research.

“We believe it is game on (again) in the Gulf of Mexico for the offshore drillers and supply vessel companies,” Barclays wrote. For example, Seadrill, a Norwegian-based drilling company, recently announced three additional ultra deep-water rig contracts, valued at $4 billion, which Barclays called “the start of a plethora of new deepwater contract awards”.

There are now 29 units active in the Gulf, which is slightly below the pre-Macondo level and close to a 2007 rig count of 32 units. Operators have already contracted about an additional 11 rigs in the upcoming year, and there are an additional 39 uncontracted newbuilds under construction.

Barclays estimated that there could be as many as 45-50 rigs in the Gulf of Mexico by 2014.

“Upcoming licensing rounds, recent exploration successes, and sustained high commodity prices support additional growth in the U.S. GOM, in our opinion,” Barclays wrote.