Sustained global recovery in land drilling forecast by Westwood Global Energy Group

8/25/2017

Aberdeen -- The recovery in the global land drilling market, led by North America, is being sustained, according to first half figures from Westwood Global Energy Group, energy market research consultancy firm.The drive, both in the U.S. and internationally, for drilling wells with longer laterals and on multi-well pads, is creating demand for high-horsepower, modern rigs that can minimize time between each well.

Westwood’s analysis shows that the number of rigs drilling around the world is predicted to increase by 7% compound annual growth rate (CAGR) over the next five years. The firm expects the global capable fleet size to rise by 154 units from 2017 to 2021, with North America accounting for 39% of this growth.

Outside of North America, the number of rigs drilling in Latin America is forecast to rise at a 5% CAGR through to 2021, following a significant decline in drilling activity from 2014 to 2016. This is being driven by a resumption of stalled activity in Mexico, the development of the Vaca Muerta shale play in Argentina and the development of the ITT project, and the Olgan field in Ecuador. Rig demand in the Middle East and North Africa (MENA) is expected to grow with the regional capable fleet forecast to increase by 43 units from 2017 to 2021.

With data on countries outside North America remaining extremely difficult to track, Westwood has launched a Global Land Rigs tool, giving online access to its database of 8,000 land rigs around the world. Covering 345 drilling contractors across 76 countries, it enables users to identify and search for information on individual rigs and contractors.

Steve Robertson, head of research, oilfield services, at Westwood Global Energy Group, comments: “There are many trends at play in this market. Whilst weekly movements in North America dominate the headlines, we expect significant growth in other territories such as South America and the Middle East, creating opportunities for operators, contractors and equipment manufacturers. However, until now it has been notoriously difficult to get information on what’s happening on the ground there.

“The market outside the U.S. is inherently more complex; we see a mix of ownership between specialist contractors and E&P companies and a trend towards consolidation of smaller contractors, a number of which have previously been subsidiaries of E&P companies. Recently, we have been supporting a number of E&P companies and OEMs to help them understand the nature and ownership of rig fleets in difficult-to-access countries.”  

“The needs of the market are changing. Efficiency and speed is critical when many projects are on the brink of becoming commercially viable. This is driving a preference for more sophisticated, higher-spec rigs, with specific component requirements varying by region but also by operator.  

“We have a first-hand insight into this market, based on gathering data from operators, contractors and manufacturers over 11 years. This means that we can supply not only a demand forecast for land rigs, but can now also inform our clients on what’s happening on the ground.”

To discover more about the data, visit https://www.westwoodenergy.com/global-land-rigs/. 

Westwood Global Energy Group is headquartered in Aberdeen with offices in London, Houston and Singapore and has more than 60 employees.

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