Maersk Energy: Uptick in Offshore Oil
COPENHAGEN, Feb 20 (Reuters) - Prospects for the offshore oil drilling market are improving but profits for drillers are still under pressure and rates will not rise before 2019, the head of A.P. Moller-Maersk's energy business said. Oil firms have seen cash flow climb in 2017 a high since a three-year slump in crude prices, lifted by their cost-cutting plans and a crude price recovery. Although this has spurred new investment, it has yet to benefit suppliers, such as Maersk, which sold its North Sea-focused oil and gas business to France's Total last year and now focuses on providing transport and logistics.
Maersk Energy CEO: Offshore Drilling Market Improving but Profitability Low
The prospects of the offshore drilling market are improving with better earnings posted by oil companies, but conditions remain tough with drillers' profitability under pressure, the CEO of A.P. Moller-Maersk's energy business told Reuters on Tuesday. "You see from the oil companies' 2016 and 2017 earnings that they've performed really well. You also see that they have started increasing capital expenditure," Claus Hemmingsen said on the sidelines of Maersk's capital markets day. "But one of the reasons that they're faring better is also because they've put an enormous pressure on their suppliers.
Maersk Drilling CEO Aims to Avoid Laying Up Rigs
Maersk Drilling expects the weak market to continue in the short and medium term but still hopes to avoid laying up or cold stacking rigs and instead keeping idle rigs on standby, ready for use, Chief Executive Claus Hemmingsen told Reuters. "We have decided to use warm stacking for a handful of rigs so they can be activated quickly again," Hemmingsen said. Profits at Maersk Drilling, a unit of shipping and oil group A.P. Moller-Maersk, fell by 25 percent to $164 million in the second quarter from a year earlier as major oil firms cut or postponed exploration projects as a result of the low oil prices.
Maersk Drilling Sees Continued Overcapacity
As much as one third of the global offshore fleet of oil drilling rigs could be idled in 2016 as energy firms scale back investments on the back of weak crude prices, the head of Danish conglomerate A.P. Moller-Maersk's rig unit said on Thursday. "I would probably estimate that we have in 2016 between 25 percent to one third of the fleet suffering form idle times," Maersk Drilling Chief Executive Claus Hemmingsen told Reuters. "The current outlook for the oil companies bringing new projects to the market is very uncertain and not very optimistic ... there will be oversupply in the foreseeable future," he added.
Maersk Offshore Service Units to Cut Head Office Jobs
A.P. Moller-Maersk's oil industry service companies Maersk Drilling and Maersk Supply Services, are to cut staffing at their Danish head offices due to the slump in oil prices. Oil companies and as a result the firms servicing them, have slashed spending and cut jobs since crude oil prices have fallen by over 50 percent since July last year. Maersk Drilling said on Wednesday it would cut 90 positions, 20 percent of the workforce at its main office, while sister company Maersk Supply Services will cut 30 jobs at its head office, where it employs some 200 people. Both are headquartered in Lyngby, a small town several kilometres outside of Copenhagen.
Maersk Drilling Slashes HQ Staff by 20%
Maersk Drilling, a unit in conglomerate A.P. Moller-Maersk, said it would cut 90 jobs at its headquarters, or 20 percent of its staff there, due to a weak rig market hit by a slump in oil prices. The cuts are part of a wider "cost reduction and efficiency enhancement programme", according to Maersk Drilling's statement. A spokeswoman declined to specify financial details but said the 90 positions amounted to 20 percent of headquarter staff. "It is regrettable that we have to scale down the head office, however, under the current market conditions it will be irresponsible not to act," Maersk Drilling CEO Claus Hemmingsen said in the statement.
Maersk to Invest Billions, Reap Savings, but No Cash for Shareholders
Denmark's A.P. Moller-Maersk said on Wednesday it would invest billions of dollars in new ships, reap hundreds of millions in savings and announced valuable contracts for its drilling rigs. But shares of the world's largest container shipping company fell more than 3 percent, partly because it failed to announce any of the initiatives the market had anticipated for its investor day in Copenhagen. Analysts had hoped that Maersk would say it had sold a big oil asset in Angola, which would have cut future capital investments, or unveil an increase in its payments to shareholders.
Maersk Drilling CEO: Slow Deepwater Rig Market Coming
Maersk Drilling Chief Executive Claus Hemmingsen talked to Reuters on the sidelines of A.P. Moller-Maersk's annual capital markets day. Maersk Drilling has focused on two areas - harsh environment rigs primarily in Norway and deepwater rigs in the Gulf of Mexico and off West Africa. "The deepwater market will be slow, for the rest of 2014 and in 2015. We do believe however it will come up in the mid-term and long-term. "If you go back one and a half years ago, you would say (the day rates would reach) $500,000-600,000, a few above that, but that would be in Angola. "Currently, we're probably talking about $400,000-$500,000 for day rates.
Maersk Drilling Wins 2-Year Angolan Extension
The head of Maersk Drilling said on Wednesday the A.P. Moller-Maersk unit has won a two-year extension for its Maersk Deliverer deepwater rig worth $387 million. Maersk Venturer, a new rig set to be delivered this year, had also won a letter of award for a short-term contract in South East Asia, Maersk Drilling Chief Executive Claus Hemmingsen told Reuters during a capital markets day. Such an award means the parties have agreed to a deal but are yet to hammer out details such as day rates. Reporting by Sabina Zawadzki
Offshore Drilling Market Dip May Prolong
The global offshore drilling market's dip could be longer than previously expected and charter rates could take until 2017 or 2018 to recover to last year's levels, the head of Maersk Drilling said on Thursday. Oil groups continue to delay projects to save cash and rig rates will fall further just as a slew of new vessels ordered during the boom years start to hit the water, said Claus Hemmingsen, the CEO of Maersk Drilling, part of Danish shipping conglomerate A.P. Moller-Maersk. "With every quarter that goes by with next to no new projects sanctioned and next to no new deepwater rigs contracted…
Maersk: Rigs Dip Could Extend to 2018
The global offshore drilling market's dip could be longer than previously expected and charter rates could take until 2017 or 2018 to recover to last year's levels, the head of Maersk Drilling said on Thursday. Oil groups continue to delay projects to save cash and rig rates will fall further just as a slew of new vessels ordered during the boom years start to hit the water, said Claus Hemmingsen, the CEO of Maersk Drilling, part of Danish shipping conglomerate A.P. Moller-Maersk. "With every quarter that goes by with next to no new projects sanctioned and next to no new deepwater rigs contracted…
Oil Drilling Slowdown to Last 12-18 Months
The current slowdown in offshore oil and gas drilling will last 12 to 18 months, and the market for rigs will rebound in 2015, Maersk Drilling said, providing a more optimistic forecast than other drilling firms. Oil companies are only delaying projects, Claus Hemmingsen, the chief executive of Maersk Drilling, a unit of Danish shipping conglomerate A.P. Moller-Maersk, told Reuters on Friday. "I would rather call it a short-term softness than anything dramatic," Hemmingsen said in a telephone interview. Activity in the deep waters off West Africa and Brazil will suffer the most, he said.
