Executive Q&A: Noble CEO addresses offshore drilling market

Summary

In an interview with Bruce Bth, Robert W. Eier, CEO of Noble Corp, discusses the recovery of the offshore drilling market, Noble’s strategic acquisitions, and their growing fleet. He highlights the company’s confidence in the future despite a slight slowdown in 2025 due to oil prices. The conversation also touches on the rise of carbon capture and storage (CCS) opportunities, Noble’s leadership in the field, and efforts toward reducing emissions. Noble's focus on safety, efficiency, and collaboration with customers sets them apart in a competitive global market, positioning them well to meet increasing energy demands.

Takeaways

• 😀 Noble Corp has significantly expanded its fleet through acquisitions like Pacific Drilling, Mer Drilling, and Diamond Offshore, now boasting 41 rigs, including the largest fleet of Seventh Generation dual BOP drill ships in the industry.
• 😀 Despite a short-term slowdown in the drilling market for 2025 due to lower oil prices, long-term prospects remain strong with rising demand for drilling services and significant project sanctions.
• 😀 The primary growth regions for deepwater rigs are the US, West Africa, and South America, with Noble particularly active in Guyana, which is considered one of the most attractive offshore plays globally.
• 😀 While new build rigs face low demand due to high costs and long lead times, the market for older rigs is more dynamic, with some cold-stacked rigs being disposed of due to flatter market conditions in 2025.
• 😀 Noble is positioning itself to capitalize on the growing carbon capture and storage (CCS) market, including involvement in the Project Greensand initiative in Denmark and developing the first modular CO2-grade drilling system.
• 😀 Offshore oil and gas operators continue to expect safety and efficiency from drilling contractors, but there is a shift towards more collaborative approaches to drive these outcomes, involving greater cooperation between contractors, service companies, and oil and gas firms.
• 😀 Noble's global positioning, asset distribution, and focus on centralizing best practices and lessons learned across operations are key to meeting the increasing demand for energy, especially in developing nations.
• 😀 The offshore drilling industry is under pressure to reduce emissions, and Noble has committed to reducing CO2 emissions by 20% by 2030, implementing real-time tracking systems to monitor fuel usage and collaborating with customers to develop sustainable practices.
• 😀 In terms of market demand, the offshore drilling market is still robust, with day rates for jackups and drillships reaching significant highs, and long-term growth anticipated despite minor short-term fluctuations.
• 😀 Noble sees a strong future in West Africa's deepwater drilling, especially as the region rebounds from previous slowdowns caused by oil price fluctuations, forecasting demand to rise again through 2026 and beyond.

Q & A

What recent acquisitions has Noble Corp made, and how have these impacted its fleet?

Noble Corp has made notable acquisitions, including Pacific Drilling, Mer Drilling, and Diamond Offshore Drilling. These acquisitions have helped expand its fleet to 41 rigs, including the largest fleet of Seventh Generation dual BOP drill ships in the industry. The company is also proud of the team integration and capabilities gained through these acquisitions, positioning Noble Corp as a strong competitor with an expanded asset base.

How does Noble Corp view the current state of the offshore drilling market?

The offshore drilling market is still experiencing high demand, with utilization rates above 90% and day rates reaching up to $500,000 for drill ships. However, 2025 might see a slight slowdown due to lower oil prices. Despite this, Noble Corp remains optimistic, with strong indicators for growth and a good backlog of work, suggesting that demand will remain strong in the coming years.

What are some key emerging hotspots for offshore drilling, and how is Noble positioned in these regions?

Key emerging hotspots for offshore drilling include the US, West Africa, South America, and particularly Guyana, where Noble Corp is the largest drilling contractor. Noble is also active in Brazil, Surinam, and Colombia, with West Africa expected to be a growth region. Noble Corp anticipates that these areas will remain crucial for future growth, despite some expected stagnation in 2025.

What is the current situation with the overhang of new build rigs in the drilling market?

The overhang of new build rigs, which were languishing in shipyards or cold-stacked, is less of a concern today. The risk of building new rigs is considered extremely low due to high costs and long lead times. Noble Corp believes that while the demand for these rigs may pick up, it will likely take a few more years for the market to fully recover.

What steps is Noble taking in the carbon capture and storage (CCS) market?

Noble Corp is actively involved in the carbon capture and storage (CCS) market, having participated in Project Greensand in Denmark. They have developed the industry's first modular CO2-grade drilling system to work safely in CO2 environments, particularly in offshore regions like the North Sea, where they see significant potential for future growth in CCS demand.

How have customer expectations changed in recent years for offshore drilling contractors?

Customer expectations have shifted toward more collaborative approaches, with an emphasis on safety and efficiency. While the focus on these aspects hasn't changed, contractors are now expected to work more closely with service companies and oil and gas companies to drive these goals. Noble Corp has embraced this by reinvesting in its business to make rigs safer and more efficient, ultimately driving value for their customers.

How is Noble Corp positioned to meet the increasing energy demand, particularly from developing nations?

Noble Corp is well-positioned to meet increasing energy demand, particularly from developing nations, through its global presence in major offshore basins. The company has the right assets for exploration, discovery, and production of hydrocarbons in key regions, while also focusing on institutional knowledge and best practices to ensure efficiency and rapid response to market needs.

What is Noble's approach to reducing emissions in offshore drilling?

Noble Corp is committed to reducing CO2 emissions by 20% by 2030. They have implemented an 'Energy Wise' program that empowers rig crews to identify and implement sustainable practices. Noble also uses real-time monitoring systems to track fuel consumption and reduce emissions, and they offer financial bonuses for reduced emissions, collaborating with customers to meet emission reduction goals.

What are the challenges faced by offshore drilling contractors when working with CO2, and how is Noble addressing these challenges?

Working with CO2 presents unique challenges, including the need for specialized equipment and safety measures. Noble Corp has developed a modular CO2-grade drilling system to safely operate in CO2 environments, which require different mitigating measures compared to conventional offshore drilling. Their work on Project Greensand in Denmark exemplifies their leadership in this area.

How does Noble Corp differentiate itself in terms of safety and efficiency in offshore drilling?

Noble Corp focuses on being the first choice for offshore drilling by prioritizing safety and efficiency. They invest in their rigs to improve safety for workers and enhance operational efficiency. This includes a more collaborative approach with customers and continuous reinvestment in the business to ensure that rigs are safer, more efficient, and better able to meet customer demands.