NOV: North American drilling still lags


NOV: North American drilling still lags

HOUSTON -- On the basis of demand for new equipment, drilling activity for oil and natural gas in North America is still lagging the booming business in deep-water and international markets, National Oilwell Varco executives told analysts and investors during a conference call Friday.

"Markets for land equipment in North America remain hesitant," said Clay Williams, National Oilwell Varco's chief operating officer.

Land drillers in North America aren't looking to fully upgrade rigs but are instead buying individual pieces of equipment. Demand for new equipment used in the process of injecting fluids into a well, a key component in hydraulic fracturing, is limited to international markets, Chief Financial Officer Jeremy Thigpen said. Oilfield services companies such as Halliburton and Schlumberger have said the market for North American pressure pumping services remains oversupplied.

However, National Oilwell Varco Chief Executive Pete Miller said he expects shale drilling to ramp up internationally, particularly in China, to the company's benefit.

Demand for offshore-drilling equipment is another bright spot, with massive new offshore discoveries, rising day rates for rigs capable of drilling in great depths, and advantageous terms from shipyards point toward strong demand for new offshore-drilling rigs and the equipment packages National Oilwell Varco offers for them.

Dow Jones Newswires

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