Offshore drilling contractor Maersk Drilling believes that continued rig scrapping is needed to obtain a healthier balance between rig demand and supply amid difficult circumstances in the offshore drilling market, which has been hit hard by the low oil price and coronavirus pandemic.

The sharp decline in oil and gas prices in the first quarter of 2020 has pushed operators to take the axe to their spending plans, which has lead to delays in sanctioning new projects and ongoing tenders as well as renegotiations of existing drilling contracts and suspension and termination decisions.