THE PATH AHEAD
Many of the offshore drillers are scrapping or retiring vessels, having concluded it may be years before they are needed again. Valaris plans to scrap 11 rigs and put aside nine others, estimating it may take two years before they are needed again.
Seadrill, which slipped into bankruptcy in 2017 after the last oil price downturn, pioneered a model for sharing costs that might prove a path forward, said analysts.
It formed joint ventures with customers including a Qatar Petroleum spinoff and Sonangol Group that have survived the last downturn. The joint ventures focused on oil fields that have long lives and gave drillers a way to lower their contract risks.
The Seadrill ventures "have delivered increased fleet utilization and incremental access to markets that are expected to show significant growth over the coming years," Seadrill spokesman Ian Cracknell said.
"It could be one of the few options to move forward," said William Turner, a vice president at Welligence Energy Analytics. "There is not a lot more folks can do to lower costs, especially in deepwater. They are going to have to get creative to survive," he said.
(Reporting by Liz Hampton in Denver and Nerijus Adomaitis in Oslo; Editing by Marguerita Choy)