Offshore drilling activity increased in the Gulf of Mexico for the 11th consecutive month in May, pushing worldwide demand higher as a result, Global Marine Inc. reports. "Demand for premium jackup rigs has been particularly strong in the U.S. Gulf," said Bob Rose, chairman of the Houston-based offshore drilling contractor. The monthly tally also showed increased demand in West Africa. The company's worldwide SCORE (Summary of Current Offshore Rig Economics) rose 3.9% in May. The indicator compares the profitability of current mobile offshore rig rates to the profitability of rates during the 1980-81 peak of the offshore drilling cycle, when speculative new rig construction was common. During that period, the SCORE averaged 100%, new contract day rates equaled the sum of daily cash operating costs plus approximately $700 per day per million dollars invested. Global Marine says its May 2000 worldwide SCORE was 28.6%, compared with 27.5% in April, and 9.8% better than May 1999 but 29.4% worse than five years ago. Gulf of Mexico day rates in May 2000 were 33.6% of the estimated level necessary to justify speculative new construction. The rate in West Africa climbed 1% to 35.5%. Decreases in the world's two other major offshore producing regions partially offset gains in the Gulf and West Africa. In the North Sea, the SCORE was 19.9%; in Southeast Asia, 27.8%. Demand for jackups continued to climb last month. Shallow-water rigs had a SCORE of 33.34%, 7.5% more than in April. Semisubmersible rig demand declined 2.3% to 23.31%. -Petroleum Finance Week
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