Things are so bleak in the oil industry that an offshore-drilling company got a 90% discount on a $700 million rig
In this July 22, 2010, picture, a swell partially obscures Development Drillers II (left) and III, which are drilling relief wells, at BP’s Deepwater Horizon oil spill site in the Gulf of Mexico off the Louisiana coast.
If you want a perfect encapsulation of just how bad it is for the energy industry, we’ve got a story for you.
Ocean Rig, an offshore oil-drilling company, just got an incredible “going out of business” deal on a deep-ocean drillship.
According to maritime-industry blog gCaptain, Ocean Rig got a sixth-generation drillship that was worth up to an estimated $700 million in 2011 for just $65 million.
So Ocean Rig just got a 90.7% discount on a massive piece of equipment.
As gCaptain noted, Ocean Rig bought four of a similar type of rig from builder Samsung Heavy Industries in 2008 for $800 million each. The price for a barrel of crude at the time was as high as $140 — crude is now just above $40.
This isn’t necessarily surprising. In an age when energy companies are becoming increasingly cost-conscious, offshore drilling is one of the most expensive types of drilling.