The forecasted and inevitable merger and acquisition season appears to be amongst us. We have already seen an increasing number of acquisitions of individual distressed rigs over the last year or so by the likes of Advanced Energy Systems, Arabdrill, Vantage, Ocean Rig and White Fleet Drilling, but company mergers have been dormant through the worst part of the downturn. But with green shoots of a recovery now evident, and with a host of distressed or restructured companies around, M&A activity is underway.
After Borr Drilling bought out Transocean’s jackup fleet plus a couple of distressed jackups from Hercules, Transocean turned around and is investing the money into Songa Offshore. This follows the earlier acquisition of Atwood Oceanics by Ensco.
The Ensco / Atwood merger does has an impact in this region, providing Ensco with a strong presence in Australia where they have been a regularly occasional player since early 2000’s, often the half rig in a one and a half jackup market. They will now have a firm floater presence there. The Atwood jackup fleet, all modern premium rigs, will allow Ensco to phase out more of its older fleet, most likely their present five (5) cold stacked jackups. Ensco has already scrapped nine (9) of its jackup fleet and sold off at least four (4) others.
Transocean obviously have their sights on dominating the harsh environment floater market with their $3.4bn acquisition of Songa. Songa have four (4) very modern semis all on long term charters with Statoil in Norway as well as three (3) 1970/1980 vintage mid water floaters that are currently idle and which Transocean will surely scrap, probably with a few more of its own elderly floaters. Until this happens Transocean will operate a fleet of fifty one (51) floaters, with thirty (30) UDW units (and four (4) more under construction), eleven (11) harsh environment floaters, three (3) deepwater floaters and seven (7) mid water floaters. The Songa acquisition also strengthens Transocean’s footprint in Norway.
With sixty (60) different drilling contractors operating floaters and one hundred and twenty (120) jackup drilling contractors around the world, there is a lot of scope for further M&A activity. Naturally the Ensco and Transocean deals have stimulated much speculation by analysts as to who is the next in line. Odfjell seems to be a common pick to be on Transocean’s radar but their roster of prime acquisition candidates includes Ocean Rig, Pacific Drilling, North Atlantic Drilling, Seadrill Partners and Seadrill itself, Maersk Drilling, Rowan and Noble. Maersk Drilling may have just leapt to the top of the list with Total having just acquired Maersk Oil, giving the impression that Maersk are exiting the oil and gas sector.
But who are the buyers? The analysts are suggesting Diamond, Rowan, Noble, Ensco, Seadrill (after restructuring), Borr Drilling as well as Transocean. One thing is for sure, no-one is going to buy out a company with a fleet of 1980’s vintage rigs unless they are mixed in with an attractive number of modern premium rigs. We certainly need consolidation, especially in the jackup market, but it is hard to envisage the number of contractors being reduced by very many when most of them operate thirty (30) year old rigs or older. But the jackup market, with near one hundred (100) stranded new builds yet to be cut lose into the market, is not going to improve until the old rigs are scrapped and this means many contractors will also have to fall away or invest in the new rigs and scrap the old.
However. the big boys are definitely preparing for an upswing in the market. There is no doubt the rig market is going to look very different a year from now. Meanwhile we are all guessing who is next.
Something interesting to share?
Join NrgEdge and create your own NrgBuzz today
Already, lubricant players have established their footholds here in Bangladesh, with international brands.
However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.
For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands.
Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market.
The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.
The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.
A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.Why “Lubricants shelf” is key to monitor engine oil market?
The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.
And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.
You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.
Regularly, lubricants retailers have to welcome the representatives of newly entered brands.
And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.
On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.
However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
Headlines of the week
Midstream & Downstream
Global liquid fuels
Electricity, coal, renewables, and emissions