DW: Russian rig demand changes direction
Published by David Bizley,
Editor
Oilfield Technology,
In 2015, Russian onshore drilling bucked global activity trends and reached record highs. Depreciation of the rouble cushioned the Russian oil industry, incentivising operators to boost activity and pay for services in roubles while gaining dollars on international markets. Last year, the global number of onshore wells drilled decreased 31%, yet the Russian market – notable for its comparative resilience – experienced year–on–year growth of 6%.
Unfortunately, 2016 is not shaping up to be a bumper year. Onshore drilling within the country is expected to fall, as major operators reduce capital expenditure to cope with a “lower for longer” price environment. As operators focus on maturing fields in Western Siberia and Volga-Urals, the industry will need to embrace new trends in drilling in order to maximise production.
DW expects any recovery in onshore drilling activity to be predominately driven by an increase in horizontal wells. Vertical wells drilled in Russia are expected to grow modestly at CAGR 3% through to 2020, however, growth in horizontal wells drilled is anticipated to be robust – CAGR 14%. Horizontal wells take longer to drill and require comparatively higher specifications (hookload and drawworks ratings). This is expected to boost demand for >1250 HP rigs – sheltering both utilisation and dayrates.
Indigenous contractors – led by Eurasia Drilling and Rosneft – continue to lead the market, accounting for approximately 93% of the total fleet. Low horsepower rigs (<1250 HP) dominate Russia’s active rig fleet, accounting for an estimated 80% of the total identified fleet. This trend is anticipated to reverse over time as demand for >1250 HP rigs increases. Current market trends suggest that contractors with greater portion of >1250 HP rigs in their portfolio are likely to be well positioned to take advantage of any recovery.
Iva Brkic, Douglas-Westwood London
Adapted by David Bizley
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/18042016/dw-russian-rig-demand-changes-direction/
You might also like
Rhino Resources and Halliburton to sign contract for integrated deep-water services offshore Namibia
Halliburton Company has announced it has been awarded a deep water integrated multi-well construction contract by Rhino Resources, a private company engaged in both onshore and offshore energy exploration in Africa.