Noble anticipates step-up in floater rig demand as deepwater oil & gas plays become ‘critical’ to global energy security

U.S. offshore drilling contractor Noble Corporation is expecting a ramp-up in drilling demand for the floater fleet from late 2025 and 2026, which will spur further rig reactivations, as it perceives the oil and gas production from deepwater reservoirs as an important factor in the global security of energy supply.

With a backlog of $6.7 billion based on its report from September 2024 and a fleet of 13 jack-ups, primarily operating in the North Sea and Norway, along with 28 floaters, mostly based in the Americas, West Africa, and Asia Pacific, Noble sees several foundations for an extended upcycle in the offshore drilling market.

The company is convinced that deepwater production growth is “increasingly critical” to global energy supply, with offshore sanctioning activities interpreted to be scaling up significantly and exceeding prior decade highs. As the ultra-deepwater rig market utilization is greater than 90%, the U.S. offshore drilling giant believes there is limited sideline capacity with newbuilds being “prohibitively uneconomic.”

Noble’s expectations indicate that day rates and free cash flow are poised for continued expansion. When it comes to the global jack-up demand, the firm describes it as stable, despite Aramco’s suspensions, as a result of incremental activity contributions from non-traditional jack-up markets such as Argentina, Brazil, Poland, and Spain.

The rig owner explains that ultra harsh (CJ-70 class) utilization is supported by rigs working down-market outside Norway, as visible upside in the country is perceived to be limited before 2026. Noble uses Rystad Energy’s research to hammer home that deepwater spending of about $79 billion is anticipated to inflect around a 20% forecasted increase for 2026-27 compared to 2023-25 levels estimated at $66 billion.

As a result, the rig owner explains that the open demand for floaters continues to build, indicating large pent-up backlog potential, given the 120 rig years of open demand across 73 opportunities, with the national oil company (NOC) share being 47%, international oil company (IOC) part at 39%, and exploration and production (E&P) of 14%. South America is calculated to account for 44% of this, West Africa 18%, Gulf of Mexico 11%, and the rest of the world 27%.

The global marketed floater fleet is estimated to be 93% contracted with 88% including seven-generation sideline capacity with significant reactivation costs and lead times, thus, Noble emphasizes that contracted demand has ranged between 145-150 during 2023-24, based on Petrodata. While the current visibility suggests flattish demand through H1 2025, the rig owner underlines that higher demand levels, expected from late 2025 and 2026, will call on additional seven-generation rig reactivations.

A few weeks ago, Wӓrtsilӓ Underwater Services finished a comprehensive thruster exchange on the Noble Voyager drillship with the project including inboard maintenance, special periodic survey (SPS), and underwater inspection in lieu of drydocking (UWILD). Noble Corporation’s 12,000-ft Ocean BlackRhino drillship recently spent time in Las Palmas, Canary Islands, to undergo upgrades. The rig was part of Diamond Offshore’s fleet until the merger with Noble Corporation was wrapped up with the latter taking over the former’s entire fleet to expand its assets to 41 rigs.

The drillship finished a development campaign in Senegal for Woodside Energy, where it worked for three years at the Sangomar field, ending the entire campaign with 3% non-productive time (NPT). Noble claims that the BlackRhino crews ran 2,265 screen joints (25.6 km) and 4,490 tubing joints (50.7 km) while also managing to transfer 170,000 barrels of mud.

The rig, alongside the Ocean BlackHawk drillship, drilled and completed 24 wells, wrapping up the Sangomar project ahead of schedule and enabling Woodside to achieve the first oil in Senegal earlier this year. The Ocean BlackRhino drillship went to Guinea-Bissau in late August 2024 to work for Apus Energia Guinea-Bissau. After it completes this job, the drillship is slated to kick off its new contract with Beacon Offshore Energy in the U.S. Gulf of Mexico.

The U.S. offshore drilling giant has been making decarbonization inroads and plans to achieve its carbon emissions reduction target of 20% by 2030. To this end, the firm completed what is believed to be the world’s first green methanol rig design for a jack-up powered by green methanol, which when used in place of traditional diesel fuel is said to have the potential to result in up to 95% CO₂ emission reductions.

Furthermore, the offshore driller implemented Energy Efficiency Insights (EEI) consumption monitoring solution across its entire fleet to potentially deliver 6–10% cuts in fuel consumption and emissions. The company also performed CO₂ injection as part of the pioneering Project Greensand, which completed its first injection at the Nini field offshore Denmark using the Noble Resolve jack-up rig.

Noble underlines that this is the first time CO₂ has been captured shoreside, transported cross-border, and intended to be permanently stored subsea. The project aims to develop a storage capacity of up to 8 million tons of CO2 annually by 2030. In addition, the firm’s Noble Resolute rig employs a fuel blend containing 20% sustainable diesel, which is estimated to reduce CO2 emissions by approximately 19%.

New technologies enable oil and gas operators and their drilling contractors to go deeper than ever and extract deepwater reserves to keep the hydrocarbon taps open to meet the energy demand. One of these new solutions is the 20,000 psi (20K) technology, which recently enabled Chevron and TotalEnergies to bring online the Anchor oil and gas project in the Gulf of Mexico, which is seen as the industry’s first high-pressure deepwater development.

Deemed as one of the largest projects in the U.S. energy industry’s history, it employs high-pressure 20,000 psi technology with reservoir depths reaching 34,000 feet below sea level. BP is planning to make use of this technology at Kaskida, which will be its first development in the Gulf of Mexico to produce from reservoirs requiring well equipment with a pressure rating of up to 20,000 pounds per square inch, unlocking the potential to bring online 10 billion barrels of discovered resources in place.

According to Strauss Center for International Security and Law, the epicenter of oil production is shifting from the Middle East to the Atlantic Ocean, thanks to advances in offshore, particularly deepwater, production technologies, which are being identified as the primary drivers of the reshaping trend within the global oil and gas market.

Strauss Center pointed out on one occasion: “There has long been a close connection between questions of energy and security. The pursuit of energy resources can be a significant driver in international affairs, and at times even a cause for conflict. The possession of such resources—or dependence on others for them—can have a profound impact on a state’s economic strength and its policy preferences.

“Technological change, meanwhile, constantly holds forth the possibility of disrupting settled assumptions about the relative distribution of these assets. Many think we currently are living through just such a period of technologically-driven change when it comes to the energy-security nexus.”

Since rising oil prices have made deepwater drilling economically viable, Strauss Center believes technological developments have been pushing the limits of what was previously considered impossible, with new imaging and positioning technology allowing drillships much higher levels of precision during the maintenance and completion of a well.

The Gulf of Mexico has been pinpointed as the biggest deepwater drilling opportunity, with 30-40 billion barrels of reserves, followed by Brazil, which also stands to gain from expanding deepwater drilling activity, given its more than 30 billion barrels of reserves.

The list is rounded up by the African continent, which is said to hold the potential to be the next frontier for deepwater, with over 30 million barrels of deepwater reserves, the largest portion of which is located in Angola. The three regions make up what is known as the Golden Triangle.