Report: Jackup market remains resilient, despite Saudi Aramco’s rig releases

The international jackup market has remained resilient despite Saudi Aramco’s recent decision to release several jackup rigs, according to Evercore ISI’s latest Offshore Oracle report. While these releases have raised questions about the future prospects of the Middle East jackup market, which has been a significant absorber of global assets over the past few years, the market has proven to be highly adaptable.

Saudi Aramco’s decision to maintain its government’s maximum sustainable capacity (MSC) directive issued in January 2024 at 12 MMBbl/d and the shift in priorities towards natural gas have led to the deferral of two oil expansion projects and decreased infill drilling in oil fields, resulting in the release of approximately 22 jackups year-to-date. The Kingdom expects to release an additional five jackups, bringing the total number to 27.

However, the initial releases have seen jackup rigs picked up in other high-spec markets, including Southeast Asia, West Africa, and the Middle East/East Mediterranean. Following the first wave of releases, five jackup rigs have been recontracted at higher day rates, including:

– **ADES Admarine 694**, awarded a contract (1 year + 18 month option) in Qatar with TotalEnergies;
– **ADES Admarine 502**, awarded an 18-month (+9-month option) contract with PTTEP in Thailand;
– **ADES Admarine 262**, awarded a 21-month contract with SUCO in Egypt;
– **COSL Zhenhai 6**, awarded a long-term contract with CNOOC in China;
– **Borr Drilling Arabia I**, awarded a 1,460-day (+options) contract with Petrobras in Brazil.

Despite the current decline in demand, the report expects a recovery in the Middle East jackup market starting from 2026, driven by the return of at least 10 to 15 rigs previously suspended by Saudi Aramco, combined with incremental demand in Qatar, the UAE, Kuwait, and the neutral zone. The market remains resilient given the flexibility and adaptability of its players.

**Supporting the Future of Offshore Exploration**
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Saudi Aramco’s continued presence in the market and its significant influence on the contracting activity underscore the importance of the Middle East in shaping the global jackup market. The region continues to lead the global demand for jackups, driven by a strong commitment to offshore oil and gas production capacity.