Operational Land Rig Demand to Rise 23% by 2017
The outlook for the land drilling rig market is looking good through to 2017, according to the latest edition of the World Land Drilling Rig Market Forecast by energy business advisors Douglas-Westwood.
Following a 16% dip during the economic recession in 2008-2009, by mid-2013 operational rig numbers had grown by 6% and are forecast to rise again through to 2017 by 23%. Growing global production targets, the shale drilling boom and the increasing complexity of well requirements are likely to be key drivers of rig demand over the forecast period. Exploration and development in new regions and enhanced oil recovery in mature regions are subsequent drivers of growth.
Report author, Hannah Lewendon, commented, “Growth in oil demand from advancing economies is expected to continue and markets formerly inaccessible to western drilling contractors are allowing greater access. However, although the activity of international rig contractors is growing in some countries, markets with high rig counts, including China, India and Venezuela, remain dominated by national oil companies’ operations. NOCs also continue to dominate the majority of markets within the MENA region; but growing international contractor participation in the significant rig fleets of Iraq and Kuwait is likely to continue throughout the forecast period.
“Where requirements for more complex well drilling are increasing, rig fleets will need to modernise to maximise the efficiency of drilling operations. With many fields in the traditional producing regions of the world reaching maturity, unconventionals will account for an increasing proportion of future hydrocarbon production. Deviated and horizontal drilling is likely to increase as a result of this, driving demand for higher specification rigs which are capable of such complex techniques.
“Despite the forecast growth, challenges remain, including the political instability in the Middle East; however, increasing difficulties here will only serve to shift drilling activities to more stable countries. In addition, as enhanced oil recovery and fracturing techniques become more in demand, greater investment and addressing of environmental concerns will need to take place as the industry seeks to increase output from previously inaccessible reserves.”