UPDATE 2-Transocean has a third of deepwater rigs seeking 2014 work

Thu Nov 21, 2013 2:11pm EST
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By Braden Reddall

Nov 21 (Reuters) - Transocean Ltd offered some hard rig numbers that validated industry concerns about slack demand for certain oil and gas work, saying on Thursday its deepwater units would represent more than a third of all those available for hire next year.

Shares of Transocean, owner of the world's largest offshore drilling fleet, fell more than 3 percent.

Executives said 14 Transocean deepwater rigs would be come off contract in 2014 out of a total of 39 industry-wide. Both figures are unusually high in a market segment where leases can run for five years or more, though two-thirds of the total only needed contract extensions, as opposed to brand-new deals.

Among rivals, Ensco Plc will have eight rigs coming available in 2014 and Seadrill five, Transocean told analysts at a meeting in New York.

But there was pent-up demand for 10 to 15 rigs in the West African deepwater market alone, where programs were held up by delays, according to Terry Bonno, Transocean's senior vice president for rig marketing.

In this cyclical business, customers often strategically wait for over-supplied markets before pressing ahead with drilling, in order to secure long-term contracts at lower rates, she said.

Referring to the deepwater market in the near term, Bonno cited a customer as saying recently: "There's a cold wind blowing."   Continued...