Why analysts predict rig prices to balloon in the next 3 years

Is it because of rising competition?

According to Maybank Kim Eng, despite rising threats from Chinese and Korean yards, analysts hold the view that Singapore yards have unique niches to defend against these competitions while they move up the value chain. 

They said they expect Keppel and SMM to secure a combined SGD11b in new offshore orders in FY13F (SGD8b in FY12 excluding Petrobras related orders). More importantly, we argue that despite the impending competition, average rig prices would hold up and even rise in the next 3 years.

Here's more from Maybank Kim Eng:

The surprise upside in jackup orders in the first half of the year would only serve to boost the impending cycle. Next in play would be the return of more semisub orders following heightened deepwater activities.

Major drillers echoed a consistent positive outlook in their 1Q13 results commentaries. While oil price may see some near-term volatility, we believe that it would be sustained above the crucial USD80/bbl level which is economically viable for most offshore oil and gas projects.