Rigs may be sought from the Gulf of Mexico

Rig contractor Rowan announced that it has been awarded a long-term drilling contract by Saudi Aramco for five Class 116-C jack-ups for drilling offshore Saudi Arabia.

The contract is for three years, starting in first-quarter 2006, with options for an additional year.
All the rigs awarded the work are currently under contract in the Gulf of Mexico.
Relocation to Saudi Arabia will begin late in fourth-quarter 2005 and should be completed by end first-quarter 2006.
To ensure such a rapid redeployment the rigs will be transported by heavylifters and Rowan is in talks with Dockwise.
However, the latter does not have five ships available and putting two or even three rigs on one heavylifter is under consideration.
Rowan CEO Danny McNease says: 'We are extremely pleased to be returning to the Middle East and look forward to renewing our relationship with Saudi Aramco. This contract will bring more global diversification to Rowan's drilling operations and, over time, should improve the average return on our investments.
'However, Rowan remains very committed to the Gulf of Mexico and we believe that this contract will also improve business conditions for our 17 offshore rigs that are currently slated to remain in that market.'
The move is likely to bring direct benefits for Rowan and other rig contractors in terms of higher dayrates in the Gulf of Mexico, while the strength of Saudi demand has implications for the international market.
Rig contractors say Saudi Aramco may need up to a further 12 rigs and the only likely source for these is the Gulf of Mexico or the raft of newbuilds coming on to the market in the next two to three years.
The Gulf of Mexico has more cold-stacked rigs than any other region and many have already moved out over the last 18 months to meet growing demand in areas such as the Middle East and the Mediterranean.
If the Middle East continues to draw down the Gulf of Mexico's surplus, it means there will be less chance of rigs moving into other areas such as the North Sea, where dayrates have risen to record levels.
There are about 97 jack-ups working or being actively marketed in the US Gulf of Mexico. There are also 18 cold-stacked and an additional 30 jack-ups working in Mexican waters. This means Rowan's new contract will reduce the active US Gulf fleet of jack-ups to 92.