Are Drilling Contractors stacking more rigs?

In the face of ultra-low rig utilisation rates, drilling contractors are stacking more rigs than ever. Laying up a drillship incorrectly can pave the way for damage to the structure and crucial systems, costing extra time and money to reactivate the asset, writes Jennifer Pallanich.

What is the best rig stacking option?

Warm stacking is the best option if the rig is inactive for a short period, as it can be redeployed pretty quickly. For uncertain situations or instances where the rig could be out of action for a longer period of time, cold stacking is the best option.

How long does it take to stack a drilling rig?

There are three types of stacking a drilling rig: A hot stack is generally less than six months and for operations that will resume quite quickly. This is a minor operation that can be carried out by an internal team. Cold stacking is for rigs that will be out of contract for up to two years.

How much does rig stacking cost?

Smart stacking requires an upfront cost of up to $5 million, but has reduced day costs down to around $15,000. As with all of these decisions, careers and companies rest on the decision making abilities of the executives and accountants. Bad decisions in the area of rig stacking will result in bankruptcies.

What is Smart Stacking rigs?

The smart stacking of rigs involves finding ways to compromise, to bring the costs of a warm stacked rig right down, but to avoid the disadvantages of a cold stack scenario. One example is where rigs are stored side by side, even if some of them will need a longer initial journey.

What happened to stacked oil rigs?

IHS notes this is a reversal of the trend from the late 1980s downturn, when rigs that were stacked were unlikely to return to active service. Following the 1986 oil crash, about 70 units, or 11% of the 1987 supply, were warm or cold stacked.