Impact of the Covid-19 Outbreak on the Jack-up Rigs Market
The spread of the COVID-19 pandemic has negatively impacted the global jack-up rigs market, which is a child market of the offshore drilling rigs market. The pandemic has affected not only public health but also the global economy. The gradual expansion of the pandemic across various regions of the world has largely impacted the oil industry. The decreasing demand, as well as the declining prices of crude oil, have significantly affected the jack-up rigs market. Besides, the increasing investments in offshore drilling and technological advancements in equipment have made drilling cost-effective and feasible. However, the COVID-19 outbreak has changed the entire scenario. The outbreak has disrupted supply chains as well as the R&D activities, which has impacted the advancements in equipment. This has profoundly influenced the growth of the market. Jack-up rigs are widely used in offshore drilling rigs. These rigs are self-elevating mobile drilling platforms arranged with legs which can be lowered to the ocean floor to establish a foundation for support. They are used in shallow water regions and can operate in depths exceeding 350 feet.
FIGURE: PRODUCTION OF CRUDE OIL IN TOP 5 LEADING COUNTRIES
The crude oil production has decreased during the lockdown and is expected to continue declining in the post-lockdown period. The prices of crude oil are expected to increase after July 2020 or in the 1st quarter of 2021, as per the analysis conducted by MRF. The outbreak of the coronavirus has decreased the demand for deep-water activities, especially in the Asia-Pacific region. All the factors mentioned above are responsible for the decline in the jack-up rigs market. The market is expected to grow in the post-lockdown period.
Source: Primary Experts, Secondary Sources and MRFR Analysis
Source: Secondary Sources