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The Biden administration’s new offshore drilling plan likely will push new investments out of the U.S. and into other parts of the world, the head of the world’s biggest offshore oil rig contractor by market value told Bloomberg on Wednesday.
“If we need the barrels, the’re going to get drilled, [and] if it’s not going to be here, it’s going to be somewhere else,” Noble Corp. (NYSE:NE) CEO Robert Eifler said in an interview, adding Brazil and West Africa would leading the world in growth as activity in the U.S. Gulf of Mexico stays flat.
The Biden administration unveiled plans last week to hold just three auctions for offshore drilling rights over the next five years, in the fewest number of oil and gas lease sales ever offered in a five-year plan by the U.S.
Prices to rent the most advanced offshore drilling rigs have already topped pre-COVID levels this year, averaging $420K/day during the first six months, according to Wood Mackenzie, but Eifler said the average dayrate probably will not hit $500K until next year.
The tight supply in floating rigs, which Evercore ISI says is now at 87%, has helped boost rig prices.
