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Chris Hand shares his optimism on the prospects for the offshore rig market. Jeffrey E Biteng / The National
Chris Hand shares his optimism on the prospects for the offshore rig market. Jeffrey E Biteng / The National

Short-term stability for demand of offshore units in Mena region

Profile: Chris Hand, the regional managing director of Bassoe Offshore, a Norwegian drilling rig broker, talks about billion-dollar deals and rising rig rates.

What is the asset class and geography that you are focused on?

We deal with all types of offshore units - that's jack-up drilling rigs, semi-submersible drilling rigs, specialised vessels like wind-farm installation vessels. The Bassoe geography is worldwide, but my personal focus is the Middle East region and the Indian Ocean. That will take me further afield as I look for assets or construction facilities to bring rigs into this region from a customer standpoint, focused on Mena and the Indian Ocean.


What is the outlook?

We're quite optimistic looking ahead into the future. We see increasing demand for rigs particularly in this region - high-specification rigs whether that's new construction or standard purchase. So we're bullish on the market and see the Middle East and the UAE as the place to be as we move forward.


What are the main risks to that outlook?

In the oil and gas market in general and the offshore sector, the ultimate driver is the oil price, which has been historically at a quite high level for the past few years. It's been stable for the last year or two. We don't see much risk to that having much of a move to the downside. The threat to the market is the global economy and the oil price, but we're bullish that it's going to stay positive so we don't see too many risks in the short term. Most oil companies in this region and most governments in this region are setting up their country budgets around oil prices of about US$80 a barrel, so there's leeway between here and $80.


What is the best investment at the moment?

We think there's a lot of good investments today in the offshore sector. To pick one out, high-specification jack-up drilling rigs are offering pretty high returns at the moment. They're getting good day rates, which have increased 10 to 15 per cent in the past six months. So there's high utilisation. In terms of a return on investment, either standard purchase or new-build, high-spec jack-up drilling rigs are good bets in the near term.


What was the best investment you were ever involved in?

The best trade I have personally been involved in was the negotiation of a multiple jack-up drilling construction contract for a regional drilling contractor. This came to a total of $1 billion. That's the type of trade that we would like to replicate at Bassoe Offshore.


What was the worst?

My worst trade? None particularly stand out. Some projects have yielded higher returns than others, but it is difficult to pick one out and say that was the worst. They have all been interesting projects. Some have better returns than others, but I wouldn't want to name the worst.



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