Westwood: slow recovery for global land rig demand expected
Published by Nicholas Woodroof,
As drilling activity plummeted across the globe over the course of 2020, operational rigs are estimated to have fallen c.25%, contracting from c.4570 to c.3530. Utilisation levels followed suit falling to an estimated c.40%, similar to the downturn levels of 2016.
While a recovery is anticipated year-on-year over the forecast period, it is expected to be gradual and characterised by operator caution as they navigate several important considerations - pace of global demand recovery, the energy transition, and geopolitics.
There will also be significant regional variances to contend with. Countries with E&P landscapes dominated by NOCs are expected to lead recovery.
Ben Wilby, Senior Analyst, at Westwood said: “The global market is expected to remain significantly oversupplied throughout the forecast period. China is anticipated to lead rig demand, while strong growth is expected in the GCC. However, both Latin and North America experienced significant demand contractions in 2020, and are not expected to recover to 2019 levels, particularly in North America, over the forecast period.”
Ben continues: “The focus for US onshore operators is profitability and creating shareholder value over production growth.”
However, the analysis also highlights areas of potential upside to Westwood’s Base Case forecast. Momentum in the development of unconventional reserves in China, Argentina and Columbia could result in stronger than forecasted rig demand. Similarly, additional demand could come from the sanctioning of projects that have seen long delays in the past, including large-scale developments in Australia. Sustained levels of higher commodity pricing and demand recovery could also encourage US onshore operators to increase the rig count and drilling of new wells.
Read the latest issue of Oilfield Technology in full for free: Issue 3 2021
Oilfield Technology’s third issue of 2021 starts with a report from Wood Mackenzie focusing on the upstream industry’s fortunes in Asia-Pacific. The rest of the issue is dedicated to features covering offshore engineering, coiled tubing, frac technology, completion technologies, water management, well placement and much more.
Exclusive contributions come from Wild Well Control, Cudd Pressure Control, TMK, NOV, Archer, Tendeka, TETRA Technologies and more.
Read the article online at: https://www.oilfieldtechnology.com/special-reports/03092021/westwood-slow-recovery-for-global-land-rig-demand-expected/
You might also like
Subsea installation project to take place in the Bass Strait, Australia
Maritime Developments Ltd (MDL) has supported DOF on a flexible installation project in Bass Strait, Australia.