By Christian Wienberg and Mikael Holter

(Bloomberg) — Maersk Drilling is trying into shopping for used oil rigs to make the most of low costs and the monetary clout of its dad or mum, A.P. Moeller-Maersk A/S.

Claus Hemmingsen, the division’s chief government officer, says the market collapse has created new alternatives and means Maersk Drilling might shift away from a sample over the previous 20 years of solely increasing via new rigs.

“We’re looking at what’s happening with asset prices and a lot will come up for sale in 2016 and 2017,” the CEO stated in an interview on the firm’s headquarters exterior of Copenhagen. “At the moment, it’s hard to read the market, and know for sure if it’s time to buy, but there will be units with good quality we would be interested in.”

“Over the last 15 years we have built our own rigs and that has been a good strategy because we could get the technology we wanted,” Hemmingsen stated. “But there are others out there who own quality units that could come up for sale.”

The plunge of crude costs because the center of 2014 has battered offshore drillers, which have been caught in a double whammy of collapsing demand from oil corporations and a glut of latest vessels which have inflated provide. Charter charges for probably the most superior rigs have dropped by greater than two-thirds and the downturn will most likely final till 2018, making it “by far the worst down cycle in the history of offshore drilling,” in accordance with a March 16 notice from Pareto Securities AS.

Several drillers together with Seadrill Ltd. are combating heavy debt hundreds and have both accomplished or are engaged on a monetary restructuring. That’s not a problem for Maersk Drilling.

The Maersk group, a transport an oil conglomerate that can also be Denmark’s largest firm, final yr generated $8 billion in money circulation. Group CEO Nils Smedegaard Andersen has stated he’s in search of takeover alternatives, although he has thus far recognized Maersk’s oil exploration and terminal models as the primary potential patrons.

“The funding situation for the Maersk group is in place, so if we went into talks with a seller we would be able to do so with secure financing,” Hemmingsen stated. “That also makes us a more solid partner for clients because they know we have the Maersk group behind us. We won’t disappear overnight or run away from our responsibility and there are currently some companies in the industry about whom you can’t say that.”

Mark Mey, chief monetary officer at Transocean Ltd. (the world’s largest offshore driller by market worth), stated this month there are at the moment “fantastic prices” for distressed property. He’d be shocked if there aren’t transactions within the subsequent 12 months, although he declined to touch upon what function his firm would play, in an interview with Bloomberg.

Maersk Drilling would solely be taken with shopping for rigs inside its two principal segments: extremely harsh atmosphere jack-up rigs or extremely deepwater floaters, Hemmingsen stated.

The latter class is at the moment hit the toughest as “oil needs to be a fair bit above $50 a barrel for that market to get traction,” he stated. Meanwhile, the marketplace for ultra-harsh environments within the North Sea “needs an oil price around the current level or perhaps slightly higher.”

Brent crude traded barely above $40 a barrel on Friday.

The CEO says he has no regrets in regards to the firm’s technique to place itself in what he describes as “the heavy end of the industry,” the place break-even costs are larger.

“It can be a challenging place, but it can also be a lucrative place.”

© 2016 Bloomberg L.P