Rig count to increase by almost 50% over next 4 years

Oil&Gas Materials 21 May 2019 14:11 (UTC +04:00)

Baku, Azerbaijan, May 21

By Leman Zeynalova – Trend:

Rig count is expected to increase by almost 50 percent over the next four years, Trend reports citing Wood Mackenzie research and consulting company.

“We think 2019 will prove to be the low point in the cycle for development drilling, and the potential upside is material. Our database tracks planned wells for all projects – onstream, under development and pre-FID. We forecast well demand – the rig count – will increase by almost 50 percent over the next four years, bouncing back to levels not seen since 2015 when the last upcycle started to peter out,” reads a report released by Wood Mackenzie.

The gathering momentum is a global phenomenon, with big projects underway or close to FID in Guyana, Brazil, Angola, Norway, Australia, Senegal, Mozambique, India, China and the Black Sea, said the company. “A number of these are in ultra-deep water (more than 5,000 feet), a segment where demand could soar to record levels in the early 2020s.”

“The other third of offshore wells drilled are exploration. We’ve assumed stable spend at 2019 levels. This might be conservative given the sector’s dramatic return to profitability in the last two years.”

The report shows that some operators are dealing now in anticipation of rising rates. Woodside has taken two rigs for its 2020/21 programme in Senegal. “Lundin Petroleum will deploy a new harsh environment rig in the Barents, also in 2020 and 2021. Chevron secured a rate for the first-ever GEN VIII rig for delivery in 2021 to drill the deepwater Anchor field in US GoM. ExxonMobil has contracted a fourth rig for its multi-year Guyana drilling program.”

Other operators with drilling plans might want to move sharpish to lock in modest rates in case the market moves against them, according to Wood Mackenzie.


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