Industry

Offshore rig market sees tailing off in demand: Westwood

Offshore rig attrition by type and annual marketed utilisation. (Image source: Westwood)

Saudi Aramco’s suspension of over 30 jackup contracts by up to one year is a factor behind the tailing off in demand in the offshore rig market, according to new research from Westwood

This suspension is related to the deferral of some expansion projects following the decision to maintain maximum sustainable capacity at 12 mn bpd rather than raise it to 13mn bpd as originally planned.

Other factors behind the dampening of offshore rig market demand are the entry of newbuild rigs in the market and the deferment of several long-term deepwater drilling and P&A projects.

With the combination of a drop in demand and increase in supply, marketed utilisation fell to 88% as of March 2025, representing a fall of 6% in less than two years.
Westwood predicts utilisation of the combined jackup, semisub and drillship segments to fall further this year to around 85%, making it likely that more rigs could permanently be removed from the active drilling fleet this year.

So far this year, nine rigs have been confirmed for removal from the active fleet: four jackups, three semisubs and two modern ultra-deepwater drillships.

The average age of assets retired from the fleet has continued to reduce for floating rigs, but not for jackups. Along with falling utilisation and age, factors increasing the likelihood of a rig being scrapped are limited future prospects, being without work or cold-stacked for some time, and being due for a five-yearly special periodic survey (SPS), which can be expensive.

Other factors can be one-off designs in a contractor’s fleet, where they may not be able to spread spare parts costs etc, outdated designs, and mergers between owners, which can lead to the streamlining of fleets.

“To sum up, due to the reduction in jackup, drillship and semisub demand and utilisation this year, we will likely see more assets moved to cold stack due to not having follow-on commitments in place,” concludes Westwood. “Meanwhile, further M&A activity could also be in the works.

“These factors we believe will spur further older, idle and surplus assets to be removed from the fleet, which in the long run may help set the stage for a stronger recovery in utilisation from the second half of 2026 onwards, when Westwood expects to see a rebound in demand.”

Sulzer partners with Manweir WLL in Qatar

The partnership will enhance the availability and quality of rotating equipment repairs and services across Qatar. (Image source: Adobe Stock)

Sulzer has partnered with Manweir WLL, the oil & gas arm of Mannai, to enhance the availability and quality of rotating equipment repairs and services across Qatar

Through its partnership with Manweir, Sulzer will now have an operations team based in Manweir’s Ras Laffan facility, reducing delivery times for oil and gas, power generation, water desalination and industrial customers whose equipment would previously need to be sent out of the country. Sulzer’s global operational excellence and OEM expertise will provide customers with world-class services, elevating reliability and efficiency for rotating equipment across Qatar. Through this partnership, the two companies will combine local knowledge with global best practices, elevating service standards, fostering innovation, and strengthening collaboration with customers to support Qatar's evolving industrial landscape. This alliance strengthens Qatar’s industrial supply chain while aligning with its vision of enhancing In-Country Value (ICV) and supporting the Qatar National Vision sustainability commitments.

"We strive to be close to our customers and this partnership with Manweir allows us to deliver high-quality service and safety standards to our customers in Qatar,” said Alex Myers, president Sulzer Services INMEC Region. “With the strategic alignment from both parties, we are poised to deliver best-in-class service solutions, ensuring operational excellence and added value to our customers.”

"We are delighted to partner with Sulzer, bringing together our strong local capabilities with Sulzer’s global expertise," said Neil Angus, general manager of Manweir WLL. "This partnership will accelerate technological advancements, enhance service delivery, and provide customers with a one-stop solution for high-quality rotating equipment repairs and maintenance. This collaboration will also drive innovation and sustainable growth for both organisations.”

Through this partnership, Manweir and Sulzer will combine local knowledge with global best practices, elevating service standards, fostering innovation, and strengthening collaboration with customers to support Qatar's evolving industrial landscape.

Gas displacing oil for Saudi Arabia power generation

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Share of energy sources in Saudi Arabia's power mix. (Image source: Rystad Energy)

Gas is set to increasingly displace oil used for power generation and industrial facilities in Saudi Arabia thanks to the giant Jafurah unconventional gas project, according to Rystad Energy analysis

By tapping into unconventional gas, Saudi Arabia could displace up to 350,000 bpd of crude burn by 2030, according to Rystad. The increased gas supply would not only curb domestic crude use but also free up more oil and refined products for export, strengthening the country’s position in global energy markets. This shift comes at a critical time, as oil product demand in Saudi Arabia is projected to rise by approximately 100,000 bpd between now and 2030, largely driven by increasing consumption of gasoline and diesel.

The Jafurah unconventional gas field, the largest liquid-rich shale gas play in the Middle East, contains an estimated 200 trillion standard cubic feet (scf) of natural gas. The Jafurah project, set to start production this year, is a key component of Saudi Arabia’s Vision 2030, which seeks to boost gas production by 60% from 2021 levels while diversifying the nation’s energy mix. The project will see more than US$100bn in investment in the next decade, positioning Saudi Arabia as the world’s third-largest shale gas producer.

“Saudi Arabia is stepping up investment in natural gas as a cleaner, lower-carbon alternative to oil and coal. This strategic pivot, alongside the OPEC+ decision to cap Aramco’s oil production at 12 million barrels per day by 2027, is designed to support price stability while increasing domestic gas consumption. Output is projected to climb to 13 billion cubic feet per day (Bcfd) by 2030, setting the stage for a major expansion in gas supply. This will allow the nation to redirect more crude for export, reinforcing its influence in the global energy landscape. As the initiative advances, the success of this shift will depend on robust midstream infrastructure, downstream integration and deeper-zone drilling campaigns,” said Pankaj Srivastava, senior vice president, Commodities Markets – Oil.

On the domestic front, the economics of fuel switching continue to favour gas over crude for power generation, resulting in operational costs that are six to eight times lower per kilowatt-hour. These cost advantages underpin Saudi Arabia’s strategy to replace crude with gas in its power mix, enabling the Kingdom to redirect more crude toward export markets and strengthen fiscal returns, says Rystad.

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Wood wins more contracts for major Iraq gas project

The GGIP includes the recovery of gas currently flared in the Basra region to supply power generation plants. (Image source: Adobe Stock)

Global engineering company Wood has been awarded two new three-year engineering and procurement framework agreements worth US$11mn by TotalEnergies EP Ratawi Hub as part of the Gas Growth Integrated Project (GGIP)

Under the contracts, Wood will support TotalEnergies to advance the Associated Gas Upstream Project (AGUP), a key part of the GGIP project. The aim is to debottleneck and upgrade existing facilities to increase energy production capacity to 120,000 barrels of oil per day on completion of the first phase.

Wood is already providing engineering design, detailed design, procurement support, and construction and commissioning assistance for the first phase of the AGUP.

The contracts will be delivered by Wood’s teams in Basra and the United Arab Emirates. Wood currently employs over 4,000 people across the Middle East, having increased its headcount by 500 in 2024. The Middle East is a strategically important market for Wood and investing in Iraq and its people is core to this. The company has made significant investments in training, competency and skills development in the market.

Shaun Dewar, senior vice president of Operations, Middle East and Africa at Wood said: “We have an extensive track record in brownfield facility modifications and are committed to delivering safe, quality and innovative outcomes for TotalEnergies. Wood has supported the Ratawi field since 2023. “

He added that the company had hired 70 Iraqis to work at the Ratawi operations hub across a range of disciplines including HSE, logistics, quality, construction, welding, electrical and document control.

Enhancing the development of Iraq's natural resources

The US$10bn GGIP is a multi-energy project designed to enhance the development of Iraq’s natural resources and improve the country’s electricity supply at the Ratawi field in Iraq. The consortium implementing the project is composed of TotalEnergies (45%), QatarEnergy (25%) and Iraq’s Basrah Oil Company (30%). The project includes the recovery of gas currently flared in the Basra region to supply power generation plants, along with the construction of a seawater treatment unit and a 1GW solar power plant. Once implemented, this project will increase electricity supply to the Iraqi people, advance Iraq’s energy self-sufficiency, reduce harmful climate effects from flared gas in southern Iraq, and allow for the export of gas products to new markets. The GGIP includes a large-scale gas processing plant, with a first phase of 300 Mcf/d that will recover gas being flared on three oil fields and supply gas to 1.5 GW of power generation capacity. In January, the consortium launched the construction works of ArtawiGas25, a first processing facility for the associated gas from the Ratawi field. This facility will process 50 Mcf/d of gas previously flared, which will supply local power plants.

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