WorldOil

Rig market will weather the storm

It’s doom and gloom splashed all over the newspapers and the Web, and pounded out by radio and television pundits: the credit crunch, global recession leading to depression, falling oil prices, collapse of emerging economies, and so on. Can the offshore rig market weather the storm? Most industry observers believe it can, but not without a few casualties. The key industry driver remains global demand for oil and natural gas, and the prices they command. While the recent decline in oil prices has been characterized by some as a “collapse” and others as a “correction,” the fact is that at present, an oil price to the far north of $100 is not reasonable or sustainable, and “correction” probably is the better description. Many analysts believe that, as far as the offshore segment of the oil and gas industry is concerned, as long as oil prices remain above $50/barrel, most exploration and production projects will proceed as planned.