Diamond Offshore Drilling scrapping three rigs as it posts first quarterly loss for 11 years

Diamond Offshore Drilling scrapping three rigs as it posts first quarterly loss for 11 years

San Francisco: Global drilling giant Diamond Offshore reported a first-quarter loss of almost $256m on Monday, reflecting the lean times in the offshore exploration and extraction industry as crude prices have slumped.

The Houston, Texas-based deepwater drilling and services contractor said it lost $255.7m as compared to $146m profit in the same period in 2014.

Three of the firm’s rigs are to be retired and scrapped. It has a fleet of 35 offshore rigs plus two being built and it ended the quarter with nine marketed rigs, compared with 18 for first quarter of 2014.

The company said it had recorded an impairment charge of $319m for eight rigs, including the three set for scrapping.

The charge saw Diamond Offshore record its first quarterly loss in 11 years.

“We are seeing drilling rig contracts terminated left, right and centre, with, for the first time, drilling rigs now going to scrap. Utilisation of drilling rigs has plummeted globally,” Mike Meade, founder of offshore brokerage M3 Marine, wrote in a recent opinion column for Splash.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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