International jack-up drillers have been warned Southeast Asia has become a no-go zone as the market faces inward during the prolonged oil downturn. A report by Icarus Consultants said it was now “almost impossible” for international jack-up players to win deals in Malaysia, Indonesia and Vietnam.
“With the dramatic fall in the price of oil and the virtual cessation of all drilling operations in Malaysia, Petronas has hardened its stance on using Malaysian owned rigs which has now become mandatory,” Icarus noted, detailing Petronas’ recent decision to slash spending by as much as $11.4bn over the next four years.
Icarus speculated that consolidation among Malaysian drillers is coming with UMW keen to exit the business and SapuraKencana keen to extend its fleet to other rig types, while Perisai’s appetite for the drilling business may also have diminished in the current market.
Similarly, in Vietnam, PV Drilling has a lock on all work that is likely to come up within Vietnamese waters this year – and there is not much, Icarus stated.
The consultants also looked at Indonesia, where cabotage laws have recently been extended to include offshore rigs.
SKK Migas, arbiter of all rig contracts, has been insisting that any rigs awarded new contracts this year must be Indonesian flagged whoever the contractor.
