Another round of Aramco suspensions expected
Market sources suggest Saudi Aramco will further reduce its rig count in the coming months through early contract terminations and potentially more suspensions, which would mark the ‘fourth round’ of rig reductions. This follows last month’s request for dayrate discussions (historically, such requests have preceded it suspending rigs). We believe this round could be extensive, affecting c10 jackups out of its current rig count of c57 rigs. At the peak, Aramco had 92 jackups (22% of global demand) on contract, while we see a potential scenario with the jackup rig count approaching 40 ahead. In addition, there could be meaningful reductions to its land rig count. Of the 33 rigs suspended by Aramco so far, we count only 11 premium rigs that found new work, and believe the overhang is likely to persist into 2026. The slow absorption of this overhang continues to put pressure on dayrates. We expect the growing uncertainty to keep investors on the sidelines for names such as Shelf Drilling, Borr Drilling, Valaris and local Middle East-based contractors.
Odfjell Drilling Ltd. (Odfjell Drilling) is an integrated offshore drilling and oil service company. The Company operates through three segments: Mobile Offshore Drilling Units (MODU), Drilling & Technology, and Well Services. The Mobile Offshore Drilling Units is responsible for operations of mobile drilling units fully or partly owned by the Company and units owned by other companies. It operates mobile drilling units in Norway, United Kingdom, Angola, Vietnam and Brazil. The Drilling & Technology segment is providing platform drilling, project management and engineering services. Drilling & Technology operates from offices in Bergen, Stavanger and Aberdeen. The Well Services segment is a provider of casing and tubing running services (TRS), drill tool rental and well intervention services to the onshore and offshore oil and gas industry. The Well Services are provided to onshore and offshore drilling operations in the North Sea, mainland Europe and Black Sea, among others.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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