Drilling Offshore drilling con- tractors reported declines in second-quarter 2009 net earnings and contin- ued stacking rigs, while oil companies coped with less cash flow to finance drilling during an economic downturn and slowing growth in world oil demand.

Drilling giant Transocean Ltd. of Geneva, Switzerland, reported seven rig leases were canceled or terminated as of early August and its rig utilization rates are down across all rig categories. Deepwater drilling remains the strongest.

On Aug. 1 3 , Chevron USA Inc. announced Transo cean's Discoverer Clear Leader began operations in the Gulf of Mexico. The dynamically positioned, double-hulled Discoverer Clear Leader is the first of five Transocean ultradeepwater Enterprise- class drillships scheduled to begin operating in 2009 and 2010 (OGJ, Mar. 6, 2006, Newsletter).

The drilling contractor is scheduled to commission a second drillship for Chevron, the Discoverer Inspiration, early next year.

Deepwater markets hold robust promise, according to reports issued this year by Douglas-Westwood Ltd. and Energyfiles, aforenmg service for oil and gas production, consumption, and drilling activity.

The reports are entitled "World Offshore Oil & Gas Production and Spend Forecast 20092013" published in August and "The World Offshore Drilling and Spend Forecast 2009-2013" published in April.

Chevron USA Inc. is using the specially built Discoverer Clear Leader under a 5 -year contract with Transocean Ltd. on Gulf of Mexico deepwater projects, including Tahiti and Jack /St. Malo fields. The drillship can conduct parallel drilling operations from a single derrick and drill to 40,000 ft in as much as 12,000 ft of water. Photo from Chevron.

Analysts forecast overall lower offshore drilling expenditures during 2009-10 followed by a return to previous growth levels.

WORLDWIDE RIG COUNT

Total world offshore expenditures are expected to reach $330 billion in 2013 compared with $240 billion in 2008, forecasters said. During the last 5 years, an estimated average of $278 billion was spent on offshore drilling.

Offshore to rebound after 2010

Crude oil price volatility led to uncertainty and project delays resulting in what Michael R. Smith, chief executive of the UK-based Energyfiles, calls "across-the-board cost deflation" in 2009.

Global upstream oil and gas budgets for 2009 were cut by 21% with more than 20 planned large projects postponed, he said.

"By 2013, the [estimated annual global offshore drilling] market will be worth nearly $90 billion, having grown from $37 billion in 2004 and $72 billion in 2008," Smith said.