Offshore Drilling Industry, Spanish Version Case Solution
After booming in 1998 and 1997, the offshore drilling business downturns in late 1998 and early 1999. Lower oil prices lead oil companies to reduce drilling funds, and rig usage drops from basically 100% to 70% in some markets. Day rates--the costs paid for the services of a rig --drop by as much as 75%.
The case exemplifies how demand and supply work jointly to establish use and costs in the short run, along with how long run supply is established in an industry where capacity add-ons take. Additionally describes the industry's move toward "turnkey" contracts, in which drilling contractors supply an entire package of drilling services, and how progress in deepwater drilling technology are changing business structure.
This is just an excerpt. This case is about STRATEGY & EXECUTION
PUBLICATION DATE: April 28, 1999
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