57th Annual Rig Census
57th Annual Rig Census Special Section of
Published in November 2010
The Deep Ocean Ascension drillship on sea trials off the coast of Korea.
NOV Downhole’s 57th Annual Rig Census
US fleet stabilizes as activity rebounds While rig utilization rates continue to climb and newbuilds enter the North American market, other census numbers yield mixed results. Steve Berkman and Tory Stokes, NOV Downhole
Census Highlights Key statistics from the 2010 census include the following: • The US rig fleet had a net drop of just 16 rigs this year, declining less than 1%. This net decrease is the result of 243 rig additions and 259 rig deletions, Fig. 1. • A number of US rigs, 212 units, were retired from active service over the past year. • Newly manufactured rigs, at 131 units, were the largest addition to the US fleet again in 2010. • The total number of US rigs meeting the census definition of “active” increased to 2,024, up 60%, from the 1,264 rigs in 2009.
U.S. Rig Attrition Continues to Increase Rigs are retired from active service when it is no longer profitable to operate the equipment or when newer units replace them. Units that have been destroyed in accidents are also removed from the census. Rigs can also leave the US market for more lucrative ones. All of these rigs are tracked in the annual census as reductions to the fleet. This year’s deletions numbered 259, about 19% higher than last year’s 218 units. Deletions were reported in three categories, Table 1: • Rigs removed from service • Rigs moved out of the country • Destroyed rigs. Rigs removed from service continue to be the largest category of deletions, jumping to 212 units this year, versus 164 in 2009.
Available
5 4
3,153
3 Active
2 1 0
2,024 ’55
’60
’65
’70
’75
’80
’85
’90
’95
Note: 2002 data is an estimate.
Fig. 1. US available vs. active rigs, 1955–2010.
’00
’05
’10
Available rigs, thousands
6
6 Number of rigs, thousands
• US rig utilization rose significantly, up to 64% from 40% last year, Fig. 2. • The number of US rig owners rose by four to 324. • Drilling contractors continue to own 86% of all drilling rigs, with operators owning the remaining 14%. • The Canadian available rig fleet declined to 795 units, down from 852 last year. • Canadian rig activity increased a dramatic 75%, with active rigs climbing to 334 versus 191 in 2009. • Canadian utilization climbed to 42% over the past year after being just 22% in 2009. • The global offshore mobile available fleet expanded by another 6% this year with a net gain of 40 available rigs, primarily due to newbuilds. • Global offshore mobile activity was stable, with active rigs up a single unit to 572. • Utilization for the global offshore mobile fleet was down to 77% from 88% previously. • Most international rig fleets experienced increases in utilization, with the exception of Latin America.
64%
5
100 80
4 3,153
3
60 40
2
Utilization rate, %
The total available rig count was effectively a wash for 2010 despite a dynamic US rig fleet, according to NOV Downhole’s 57th annual rig census (previously known as the ReedHycalog rig census). Newly manufactured and refurbished units were offset by many retiring and dormant rigs over the past year, bringing an end to the last few years’ overall swell in US rigs. Commodity prices have made a comeback since last year’s dismal showing, causing activity to rebound somewhat and resulting in a tightening of US fleet utilization in 2010. Canada experienced a sizeable drop in availability this year, but did show a considerable jump in active rigs. The global offshore mobile fleet numbers were the reverse, however, with available rigs climbing while activity remained stagnant. In order to compile a complete picture of the worldwide rig market, NOV Downhole works closely with several companies to pull together industry statistics. RigData and ODSPetrodata provide detailed information regarding the US land and global offshore mobile rig fleets. The Canadian figures are provided by NOV Downhole personnel in Calgary along with Nickle’s Energy Group. Summarized data regarding the international land rig fleet are collected by NOV Downhole regional managers and submitted annually for this article.
20 1 ’55 ’60 ’65 ’70 ’75 ’80 ’85 ’90 ’95 ’00 ’05 ’10 Note: 2002 data is an estimate.
Fig. 2. US available rigs vs. utilization, 1955–2010. World Oil NOVEMBER 2010
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NOV Downhole’s 57th Annual Rig Census
Table 1. Changes in the available US fleet 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 Previous year’s fleet 3,169 3,076 2,817 2,298 2,026 1,988 1,719 1,722 1,722 1,636 1,644 1,705 1,665 1,649 1,729 1,841 1,853 1,996 2,251 2,320 2,542 2,752 3,331 Reductions to fleet Removed from service -212 -164 -59 -77 -99 -141 -68 -123 n/a -87 -76 -89 -59 -103 -114 -162 -122 -208 -269 -193 -353 -323 -796 Moved out of the country -45 -49 -29 -14 -14 -29 -1 -45 n/a -6 -4 -7 -10 -18 -24 -30 -21 -16 -46 -38 -23 -23 -22 Destroyed -2 -5 0 -4 -6 -3 0 -4 n/a -3 -2 -4 -3 -6 -3 -3 -5 -8 -7 -21 -6 -28 -17 Subtotal deletions -259 -218 -88 -95 -119 -173 -69 -172 n/a -96 -82 -100 -72 -127 -141 -195 -148 -232 -322 -252 -382 -374 -835 Additions to fleet
Newly manufactured 131 237 202 349 238 23 32 48 n/a 9 6 6 7 2 3 0 2 1 3 0 0 1 8 Brought back into service 87 36 101 189 95 124 125 37 n/a 56 22 18 37 72 33 38 68 63 59 138 116 111 226 Moved into the country 16 30 13 5 5 6 7 10 n/a 12 12 6 6 12 1 10 24 12 1 2 4 2 0 Assembled from parts 9 8 31 71 53 58 79 74 n/a 105 34 9 62 57 24 35 42 13 4 43 40 50 22 Newly identified* - - - - - - 95 - - - - - - - - - - - - - - - Subtotal additions 243 311 347 614 391 211 243 169 0 182 74 39 112 143 61 83 136 89 67 183 160 164 256 Net change -16 93 259 519 272 38 174 -3 n/a 86 -8 -61 40 16 -80 -112 -12 -143 -255 -69 -222 -210 -579 Total available rigs 3,153 3,169 3,076 2,817 2,298 2,026 1,893 1,719 n/a 1,722 1,636 1,644 1,705 1,665 1,649 1,729 1,841 1,853 1,996 2,251 2,320 2,542 2,752
Number of available rigs
*2004 adjustment made in conjuction with RigData.
1,200 1,000 800 600 400 200 0 -200 -400 -600 Note: 2002 data is an estimate. -800 ’55 ’60 ’65 ’70 ’75 ’80
-16
’85
’90
’95
’00
’05
’10
Fig. 3. US change in available rigs, 1955–2010.
Census rules exclude rigs from the available count that have been stacked for a significant amount of time, require a large capital expenditure to be operable, or have been auctioned for parts or cannibalized to keep other rigs running. The US fleet has been experiencing a building boom for the last several years, which has diminished the demand for many of the older units. Since activity has picked up recently, there are many rigs leaving the fleet in order to be refurbished. Others are simply being stacked until economic conditions warrant their reactivation. Rigs are tracked in the census each year as they move into and out of the country. In this year’s count, 45 rigs were noted as moving out of the US, a slight decrease from the 49 rigs that moved out last year. The destination of some of these rigs is known, and it appears that a large portion have relocated to Mexico. Rig movement into the US is covered below. Just two rigs were counted as destroyed for the US in the 2010 census. Much has been published about the recent offshore disaster that affected one offshore unit. A land unit was also reported as damaged beyond repair during the time period since the last census was taken. U.S. Rig Additions Rig-building programs continue to turn out new units that increase the size of the US available fleet. Newbuilds have been the primary way owners have maintained their fleets over the past several years, although there are also refurbished and reacti4
NOVEMBER 2010 World Oil
vated units that supplement their businesses as well. The census reports that the US fleet added 243 rigs overall during the past year, down 22% from the 311 units gained in 2009. These 243 rigs added did not completely offset the total reductions of 259 units. Fleet additions fall into one of four categories, Table 1: • Newly manufactured rigs • Rigs brought back into service • Rigs moved into the country • Rigs assembled from parts. The rapid fleet expansion of the past five years due to newly manufactured units is starting to slow. Newbuilds are still coming online at a brisk pace and remain the primary reason for expansion, but have dropped significantly in 2010. Another 131 units were built from scratch this year, down from 237 last year. The total number of newbuilds added over the past five years is now 1,157, indicating that 37% of the total US fleet is less than five years old. Of the 131 new units, 120 were land rigs, seven were floating and four were bottom supported. The number of US rigs brought back into service jumped this year to 87 units. This is more than double the 36 units that were reactivated in the 2009 census. Note that each of these reactivations had been counted in previous census tabulations, but had been subsequently removed due to becoming inactive or inoperable. These rigs were refurbished or reactivated over the past year and have now reentered the available fleet. Apparently, the increase in activity, coupled with the slowdown of newly manufactured units, has prompted companies to reactivate rigs in response to current work or future prospects. Just 16 rigs were moved into the country over the past year, versus 30 in 2009. As is often the case, many of these rigs came from Mexico. Considering that 45 rigs moved out of the US for the 2010 census, while 16 moved in, there was a net decline of 29 units resulting from rig moves. It has been a tendency over the past six years that more rigs are leaving the US than are entering. Furthermore, if offshore permitting remains slow due to new regulations following the end of the deepwater moratorium, this trend is expected to continue. Just nine rigs assembled from parts were added to the fleet this year. This is similar to the eight units last year. In recent years, many more rigs have been newly constructed in total or refurbished than put together from cannibalized units.
Total rig additions numbered 243, while deletions totaled 259. The net change in the fleet over the past year was just a 16-unit decrease, showing overall fleet stability and a decline of less than 1%, Fig. 3. Canadian Fleet Continues to Shrink Beginning with the 2009 census, market conditions caused the Canadian fleet to contract in size. A few reactivated and new units do continue to come online in Canada. However, despite increasing demand this year, a significant number of rigs are being removed from service after sitting idle for several years. The overall count of available Canadian rigs fell by 57 this year. Using data supplied by Nickle’s Energy Group and NOV Downhole personnel, we determined that newly manufactured units totaled about half of last year’s 29. Newbuilds are no longer the primary way rigs are added to the fleet. Rigs brought back into service tallied 35 units this year, significantly more than the number seen for the last several years. There were also four units that moved into the country. No rigs were recognized as assembled from parts. Total rig additions came to 54 units overall for Canada. As mentioned previously, the foremost cause of the decline in the Canadian fleet this year was due to rigs removed from service. A considerable number, 94 units, were taken out of the census based on information gleaned regarding their operational or stacked status. This is more than double the 42 that were retired last year. Furthermore, 17 rigs left Canada over the past year to relocate to other countries. This compares to 42 that moved out last year. Fortunately, no Canadian units were reported as destroyed over the past year. Deletions numbered in total 111 units. Overall, Canada saw a decline of 57 units and an available count of 795, a drop of 7%, Table 2. Global Offshore Mobile Fleet Continues to Expand The global offshore mobile rig fleet continued to experience growth this year, predominantly due to newly manufactured units. Forty rigs counted as brand new were added to the fleet for 2010. This is similar to the 43 new units included in the 2009 census. Besides these newbuilds, six offshore rigs were also reactivated this year. ODS-Petrodata, which assisted in pulling together census figures, estimates that about 66 brand new units are scheduled for worldwide delivery by the time the 2011 census rolls around next spring, although some inevitably Table 2. Changes to the Canadian rig fleet 2010 2009 2008 2007 Previous year’s fleet 852 875 871 799 Reductions to fleet
Removed from service -94 -17 -24 -6 Moved out of the country -17 -42 -19 -10 Destroyed 0 0 -1 0 Subtotal deletions -111 -59 -44 -16 Additions to fleet
Brought back into service 35 2 1 0 Newly manufactured 15 29 47 86 Moved into the country 4 5 0 0 Assembled from parts 0 0 0 2 Subtotal additions 54 36 48 88 Net change -57 -23 4 72
2006 741 -7 -8 0 -15 0 63 0 10 73
58 Total available rigs 795 852 875 871 799 Total active rigs 334 191 406 371 669 Utilization 42% 22% 46% 43% 84%
will not meet that timetable. No new offshore rigs entering the fleet this year were described as assembled from parts. Overall reductions to the global offshore mobile fleet numbered just six this year, a decline from the 14 removed from the census in 2009. Four units were taken out of the census due to being damaged beyond repair, while two were removed from service due to age or inactivity, Table 3. If a rig has not worked for more than five years and does not have upcoming contracts, it is generally not classified as available. This is the case since it would usually take a significant capital expenditure in order to put the rig back into working condition. Therefore, these drilling units cannot be counted as available by census rules, although a few may later be reactivated if market conditions warrant it. Note that since platform and inland barges are particularly difficult to track, they are not included. Overall, the available count for global offshore mobile units stands at 745 units, a net increase of 40 rigs, a 6% jump. The fleet is widely distributed with the US and Middle East dominating, followed by Southeast Asia and South America, Fig. 4. The makeup of the fleet by rig type is shown in Fig. 5. U.S. Activity Rebounds Dire market conditions due to the US recession caused the rig count to plummet in 2009, marking the second-steepest decline in the 57-year history of the census. Now, a year later, oil and gas prices have recovered somewhat and rigs have been going back to work. The active rig count jumped 60% for 2010 to 2,024 after being at 1,264 a year ago. Although not yet back to 2008 levels, major improvement is being made. There are several reported active rig counts in the industry, and the methodology used to count active rigs for the NOV Downhole census is different from most. This census counts a rig as active if it has “turned to the right” at any time during a defined 45-day period. For 2010, this was between May 5 and June 18. Therefore, since a longer time period is used to monitor activity, the NOV Downhole statistic will always be higher than other reported weekly rig counts. Rig utilization, the ratio of active to available rigs, is an often-quoted industry statistic and can indicate the health of the industry. Last year’s depressed activity level pushed US utilization down to just 40%, a level not seen since the late 1980s. This year’s semi-recovery brought utilization up to 64%—not a high number, but a significant improvement. Med./Black Other* Sea 5% 3% Far East 5% Mexico 5%
US Gulf 16%
Indian Ocean 6%
Middle East 16%
South America 12% West Africa 8%
NW Europe 10% SE Asia 13%
*Total of regions with less than 3% each include: Australia/New Zealand, Baltic, Canada, Caspian, Central America and Russian Arctic.
Fig. 4. Global offshore mobile fleet by region in 2010. World Oil NOVEMBER 2010
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NOV Downhole’s 57th Annual Rig Census
Submersibles* 7 rigs 14% util. Drill barges Semisubmersibles 24 rigs 185 rigs 88% util. 83% util.
Tenders 28 rigs 82% util.
Jackups 451 rigs 74% util.
*Arctic rigs are included with submersibles.
Drillships 50 rigs 80% util.
Total utilization = 77% Total rigs = 745
Fig. 5. Makeup of the global offshore mobile fleet in 2010.
Table 3. Changes to the global offshore mobile fleet 2010 2009 2008 2007 Previous year’s fleet 705 675 650 654 Reductions to fleet Destroyed -4 -3 0 0 Removed from service -2 -11 -7 -26 Subtotal deletions -6 -14 -7 -26 Additions to fleet
2006 641 -6 -10 -16
Newly manufactured 40 43 28 11 9 Brought back into service 6 1 4 11 20 Assembled from parts 0 0 0 0 0 Subtotal additions 46 44 32 22 29 Net change 40 30 25 -4 13 Total available rigs 745 705 675 650 654 Total active rigs 572 571 592 574 557 Utilization 77% 81% 88% 88% 85%
There were 1,129 available US rigs that were not working during the 2010 census period. Some of these idle rigs may have been under contract and waiting for the start of their projects or being moved to their next drilling locations. Rigs stacked less than one year numbered 345; one to two years, 722; and two to three years, 62. Aging rules of the census state that any rig stacked for longer than three years will be removed from the available fleet. However, most rigs tend to be decommissioned before then. Rigs that fall into this category and are removed from the fleet because they are no longer economically viable fall into the group removed from service. Full-year utilization, the percentage of available rigs that drilled sometime during the past year, gives a slightly different picture. Adding the 345 rigs stacked less than one year to the 2,024 active units in the census provides the number of rigs that drilled during the past year. This full-year utilization figure indicates that rig owners used 2,369 units, or 75% of available rigs over the past year. This statistic is considerably lower than usual and shows that there is still a lot of oversupply since rig demand is not yet close to what it was two years ago. For 2010, every US region except for Alaska experienced a rise in rig activity. The regional breakdown, comparing this year’s numbers to last, is shown in Table 4. The ArkLaTex region continues to show the highest overall number of active rigs with 389, a 132-unit increase from the previous year. Utilization by region shows results consistent with activity levels, with all regions having increases except for Alaska. Examining US land and offshore rigs independently, gross utilization for land rigs was up by about a quarter to 65% from 39% in 2009, Table 5. The US marine fleet also showed some improvement this year, with offshore utilization climbing to 59% after being 55% last year. Demand does vary by rig type, with floating rigs remaining in greatest demand at 73% utilization. Rigs experiencing the lowest level of utilization are now the offshore platform units, at 50%. The total US rig fleet was also analyzed by depth capacity, revealing a bump in utilization for units in every depth range, Table 6.
Table 4. US regional census results Power source Rig type Ownership SCR/ Bottom Total Region Year Available Active Utilization Driller Operator Mechanical electric Land Barge Floating Platform supported offshore Alaska 2010 26 13 50% 25 1 8 18 26 0 0 0 0 0 2009 27 14 52% 27 0 9 18 27 0 0 0 0 0 Northern 2010 208 150 72% 190 18 109 99 208 0 0 0 0 0 Rockies 2009 166 52 31% 155 11 117 49 166 0 0 0 0 0 Southern 2010 354 205 58% 298 56 221 133 354 0 0 0 0 0 Rockies 2009 409 146 36% 347 62 245 164 409 0 0 0 0 0 Northeast 2010 319 188 59% 269 50 271 48 319 0 0 0 0 0 States 2009 274 139 51% 219 55 256 18 274 0 0 0 0 0 Permian 2010 415 314 76% 365 50 356 59 415 0 0 0 0 0 Basin 2009 417 130 31% 381 36 348 69 417 0 0 0 0 0 Gulf Coast 2010 369 242 66% 337 32 157 212 349 5 2 0 13 20 2009 386 174 45% 347 39 210 176 369 5 2 1 9 17 ArkLaTex 2010 598 389 65% 513 85 277 321 598 0 0 0 0 0 2009 612 257 42% 542 70 329 283 612 0 0 0 0 0 California 2010 92 59 64% 78 14 52 40 91 0 0 1 0 1 2009 93 40 43% 77 16 58 35 92 0 0 1 0 1 Southeast 2010 297 188 63% 283 14 85 212 103 50 39 33 72 194 States 2009 263 127 48% 252 11 72 191 83 46 41 37 56 180 Mid- 2010 475 276 58% 344 131 301 174 475 0 0 0 0 0 Continent 2009 522 185 35% 382 140 348 174 522 0 0 0 0 0 Total 2010 3,153 2,024 64% 2,702 451 1,837 1,316 2,938 55 41 34 85 215 2009 3,169 1,264 40% 2,729 440 1,958 1,211 2,971 51 43 39 65 198 6
NOVEMBER 2010 World Oil
Global Offshore Activity Flat The global offshore mobile fleet was essentially unchanged during the census window for 2010. Total working Table 5. US land rigs, number and utilization Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Available rigs 2,429 2,249 2,061 2,006 1,809 1,660 1,613 1,501 1,425 1,428 1,449 1,384 1,370 1,452 n/a 1,488 1,736 1,813 2,100 2,598 2,871 2,971 2,938
Active rigs 1,289 1,242 1,472 1,306 1,089 1,120 1,049 1,047 1,071 1,235 1,092 699 1,006 1,350 n/a 1,160 1,496 1,729 2,008 2,222 2,365 1,156 1,897
Utilization 53% 55% 71% 65% 60% 67% 65% 70% 75% 86% 75% 51% 73% 93% n/a 78% 86% 95% 96% 86% 82% 39% 65%
Other U.S. Industry Trends Strong commodity prices in recent years have prompted new drilling companies to form. Since 2004, the net number of new businesses entering the US census has typically increased annually, with the exception of 2009, when the overall total dropped by just one. This year, after all the new companies were added and those ceasing operations were deleted, the total number rose by four to 324, Fig. 9. Census statistics also track the ownership of rigs by the type of owner. There have always been many more rigs in the possession of drilling contractors as opposed to operators, although the number of operator-owned rigs has generally risen. This year, however, no change has occurred and operators continue to own about 14% of the overall US fleet, or 451 rigs. Drilling contractors own the remaining 86%, or 2,702 rigs. Another way to get a sense of US rig ownership is by examining the fleet sizes of companies and looking at the trend over the years. Rig ownership by fleet size has been compared since 1993, when consolidation really began increasing. In more recent years, there have only been slight fluctuations in this area. This year, the largest companies continue to hold about 62% of the total fleet. One difference, though, is that there has been a slight switch in percentages for companies holding two to five rigs and those having six to ten rigs, with the smaller companies gaining rigs overall and the larger companies downsizing, Fig. 10. 1,000 875 871 852 900 799 795 741 800 Available 680 669 700 640 653 600 Active 450 500 406 550 400 334 449 191 371 300 346 200 100 2002 2003 2004 2005 2006 2007 2008 2009 2010
Number of rigs
global Land Rig Utilization Tightens Utilization rates have been tracked for the past four years for the primary international regions. After a decline in 2009, most areas experienced utilization increases for 2010. The overall rate has risen to 88% from 84% in 2009, Table 7. Regarding individual regions, Europe’s rise in utilization this year was mostly due to increases in FSU activity. Africa, having had the lowest rate at 70% last year, has shown some recovery and is now at 77%. Libya and Nigeria, which battle with security issues, still have a number of idle rigs and kept this percentage from rising further. Latin America was the only region reporting a utilization drop for 2010. The source of this weakness was Mexico, where Pemex activity has slowed significantly. Note that some international areas have large numbers of available rigs, but these units are typically of older technology and may not be universally mobile or marketable. Also, in some cases, available rigs are actually under contract awaiting a project start, and are realistically unavailable for other work.
rigs numbered 572 during the spring 45-day active period (May 5 to June 18), up just one rig from 2009. This count includes all offshore mobile units, with the exception of platform and inland barge rigs. With rig supply increasing while rig demand remains stagnant, utilization dropped to 77% from 88%, Fig. 8.
Fig. 6. Canada available vs. active rigs, 2002–2010.
400 350 Number of rigs
Canadian Activity Begins to Rebound Canada experienced a considerable increase in rig activity for 2010. Although there have been several ups and downs since Canada was included in the census in 2005, last year’s activity was the lowest noted, with just 191 active rigs for the spring 45-day window. Market volatility continues, with the active count bouncing back somewhat to 334 rigs, an increase of 75%. With available rigs declining and active rigs increasing, Canadian utilization figures have improved for 2010, rising to 42% from a low of 22% last year, to reach essentially the level of 2007 and 2008, Fig. 6. Regarding Canadian drilling capacity, almost 40% of Canada’s rigs lie in the 6,000–9,999-ft range. Fleet availability and activity by depth capacity show that utilization is now highest in the 10,000–12,999-ft range (55%) and lowest in the 3,000–5,999-ft range (22%), Fig. 7.
300
Idle Active
250 200 150 100 50 0
> 20,000 16,000 13,000 10,000 6,000 ft. to 19,999 to 15,999 to 12,999 to 9,999 Depth, ft
3,000 to 5,999
Fig. 7. Canadian rigs by depth capacity 2010. World Oil NOVEMBER 2010
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NOV Downhole’s 57th Annual Rig Census
Table 6. US rig utilization by depth capacity Depth rating, ft Over 16,000 to 13,000 to 10,000 to 6,000 to 3,000 to Region Status 20,000 19,999 15,999 12,999 9,999 5,999 Total Alaska Available 10 0 8 6 1 1 26 Active 4 0 4 5 0 0 13 Idle 6 0 4 1 1 1 13 Utilization 40% - 50% 83% 0% 0% 50% Northern Available 27 66 50 40 9 16 208 Rockies Active 24 58 42 13 5 8 150 Idle 3 8 8 27 4 8 58 Utilization 89% 88% 84% 33% 56% 50% 72% Southern Available 16 31 87 94 87 39 354 Rockies Active 10 16 60 39 55 25 205 Idle 6 15 27 55 32 14 149 Utilization 63% 52% 69% 41% 63% 64% 58% Northeast Available 1 15 38 47 160 58 319 States Active 1 15 32 38 74 28 188 Idle 0 0 6 9 86 30 131 Utilization 100% 100% 84% 81% 46% 48% 59% Permian Available 22 31 97 170 83 12 415 Basin Active 7 26 72 143 62 4 314 Idle 15 5 25 27 21 8 101 Utilization 32% 84% 74% 84% 75% 33% 76% Gulf Coast Available 106 63 79 59 47 15 369 Active 79 51 41 39 28 4 242 Idle 27 12 38 20 19 11 127 Utilization 75% 81% 52% 66% 60% 27% 66% ArkLaTex Available 72 140 168 133 61 24 598 Active 58 124 96 59 38 14 389 Idle 14 16 72 74 23 10 209 Utilization 81% 89% 57% 44% 62% 58% 65% California Available 5 11 13 21 18 24 92 Active 3 10 7 13 10 16 59 Idle 2 1 6 8 8 8 33 Utilization 60% 91% 54% 62% 56% 67% 64% Southeast Available 186 26 31 32 14 8 297 States Active 111 17 20 24 10 6 188 Idle 75 9 11 8 4 2 109 Utilization 60% 65% 65% 75% 71% 75% 63% Mid- Available 72 89 91 119 75 29 475 Continent Active 57 68 41 55 40 15 276 Idle 15 21 50 64 35 14 199 Utilization 79% 76% 45% 46% 53% 52% 58% Rig type Inland Available barge Active Idle Utilization Floating Available Active Idle Utilization Land Available Active Idle Utilization Offshore Available platform Active Idle Utilization Bottom Available supported Active Idle Utilization Totals Available Active Idle Utilization
8
32 14 18 44% 41 30 11 73% 349 255 94 73% 17 9 8 53% 78 46 32 59% 517 354 163 68%
NOVEMBER 2010 World Oil
2 2 0 100% 0 0 0 - 461 380 81 82% 7 2 5 29% 2 1 1 50% 472 385 87 82%
8 5 3 63% 0 0 0 - 647 408 239 63% 4 1 3 25% 3 1 2 33% 662 415 247 63%
7 5 2 71% 0 0 0 - 710 420 290 59% 2 2 0 100% 2 1 1 50% 721 428 293 59%
4 3 1 75% 0 0 0 - 548 316 232 58% 3 3 0 100% 0 0 0 - 555 322 233 58%
2 2 0 100% 0 0 0 - 223 118 105 53% 1 0 1 0% 0 0 0 - 226 120 106 53%
55 31 24 56% 41 30 11 73% 2,938 1,897 1,041 65% 34 17 17 50% 85 49 36 58% 3,153 2,024 1,129 64%
Contractors WORRY about Rig Rates Most US and several Canadian drilling contractors have been surveyed for the past 20 years regarding their business direction and their opinions of the industry. These professionals continue to shed new light on overall industry concerns and future projections. Eighteen contractors participated in this year’s survey, owning a total of 710 rigs. These companies predominately operate in the US, but a few Canadian companies also participated. These companies represented a wide variety in both company size and regional areas. For the survey, contractors are asked to rank some key issues based on their level of importance and estimate a number of changes to their business, both past and anticipated. Rig rates are often the top concern of contractors, and this year is no different. Although drilling activity has picked up, there is still a wide gap between rig demand and supply. This apparently has kept rig rates from climbing to acceptable levels for many contractors. Another issue brought to light again by the survey is the problem of crew availability. Even though crew concern had dropped to tying with insurance costs as the No. 3 concern last year, it has risen to No. 2 and will probably always be a struggle for companies attempting to man their rigs. Government regulations, the No. 2 concern last year, dropped to No. 3 for 2010. There continues to be apprehension about regulatory changes over the next several years. This was especially pushed to the forefront after the recent Gulf of Mexico rig disaster and subsequent deepwater moratorium, which ended in early October. According to survey respondents, land rig rates in actual dollars have averaged $13,282/day during May– June 2010. Reflecting the climb in activity, labor rates for contractors have also begun increasing again, and were up 3% on average since last year. Maintenance expenses are up again as well, rising 9% for 2010. Climbing rig maintenance is a logical consequence of more units being refurbished and put back into service. Contractors responding to our survey indicated that their rig activity has gone up 26% on average for 2010. This is considerably lower than the overall industry increase of 60% for the census this year. However, there has apparently been enough improvement to warrant some optimism, since a greater number of contractors are expecting more promising times ahead for the drilling contracting industry during the next two years. Many foresee technology and specialty rigs making an impact in the near future. Despite some optimism, there is also a lot of uncertainty, and the survey suggests that many have a “wait and see” attitude, especially regarding government regulation. Overall, contractors’ estimates about their future business expectations vary widely, but on the average they expect a modest climb of 5% over the coming year. Contractors were asked how changes in oil and gas prices would affect their businesses. When asked what prices would cause them to raise their activity from its current level, the average reply was $86.30/bbl for oil and $6.50/Mcf for gas. When asked what prices would cause them to lower their activity level, the average answer was $53.90/bbl for oil and $3.70/Mcf for gas. As of this writing, prices are still hovering within those
Number of rigs
800 700 670
677
600
Available
678
500 400 488
673
650
545
557
574
Active
479
460
641
654
486
675
705
592
571
745 572
300 200 100 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fig. 8. Global offshore mobile available vs. active rigs, 2001–2010.
Number of rig owners
690 609
600
558 497
500
460
400
412
388 361 316
300
289 270
200 100 0
’88
’90
’92
’94
’96
240 219
’98
208 191185 179
213 226
’00
’04
’02
324 310 321 320
257
’06
’08
’10
Note: 2002 data is an estimate.
Fig. 9. US rig owners, 1987–2010.
Table 7. International utilization
2006
2007
Utilization 2008
2009
2010
Europe incl. FSU Africa Middle East Asia incl. China Latin America Overall
96% 99% 88% 97% 92% 95%
97% 86% 94% 95% 90% 94%
90% 85% 94% 96% 90% 92%
78% 70% 82% 93% 81% 84%
86% 77% 90% 96% 74% 88%
Total rig fleet, %
100 90 80 70 60 50 40 30 20 10 0
7
6
5
5
5
23 22 28 26 26
20 21 19
25 22 22
29 20 25 28
’93
’95
4
4
4
4
4
3 3 4 4 3 3 3 3 10 13 18 17 16 13 13 13 14 13 14 14 12
10 10 11 12 12 11 13 13 14 11 12 10 10 11 11 10 11 11 11 12 15 13 10 12 19 18 16 15 24
1 rig 2–5 rigs 6–10 rigs 11–20 rigs > 20 rigs
18 50 54
58 62 62 63 60 55 58 61 60 62 62
37
’97
U.S. Forecast for 2011 Stagnation will again characterize the industry for the 2011 census period. Some new rig rollouts will continue over the next year but will again be countered by retiring units, so large increases in available rigs are not likely. Due to the existing political and economic situation, activity may not climb much higher either. A waiting game seems to be in the cards for the drilling industry’s near future. WO Acknowledgments The following are recognized for their contributions to this year’s rig census: Michael Wayne (RigData); Tom Kellock (ODS–Petrodata); Diane Henderson (Nickle’s Energy Group); Leonora Compton, Wade Dannhaus, Amy Dismore and Dave Macneil (NOV Downhole).
800 700
that they have no plans for change. Very few companies mentioned that they were planning to downsize, diversify, merge or explore international opportunities.
’99
’01
’03
’05
’07
’09
Note: 2002 data not available.
Fig. 10. US rig ownership by fleet size, 1993–2010.
ranges, so it doesn’t appear that most contractors will be changing their business direction based on commodity prices alone during the near future. Many contractors are optimistic enough about the market to have expansion strategies for the future. When asked to describe their company’s plans for the next five years, the largest percentage of survey respondents, 44%, said they are preparing to increase their fleets. The second largest group, 43%, tells us
The Authors Steve Berkman has been the Director of Strategic Marketing for NOV Downhole since January 2009. Prior to that, he had been Marketing Manager for ReedHycalog since July 2004. He began with ReedHycalog over 27 years ago—starting as a Design Engineer in 1982. Mr. Berkman has been all over the world in various engineering and sales positions. He received a BS degree in mechanical engineering from the University of Texas. Tory A. Stokes is a consultant for NOV Downhole, having previously been employed by ReedHycalog as Senior Marketing Analyst for eight years. She graduated with a BS degree in applied mathematics from Texas A&M University in 1985, and earned an MBA from the University of Houston in 1993.
Census Ground Rules • Company sales regions were used for the geographical breakdown in Table 4. • Contractor-owned rigs are those belonging to companies whose primary business is offering drilling contracting services. • To be considered active, a rig must be drilling at least one day during the 45-day qualification period. • Only workable rotary rigs are included; cable tool rigs are not. • To be considered available, a rig must be able to go to work without requiring a significant capital expenditure. • Rotary rigs stacked for an extended period of time, typically three years or longer, are not counted as available. • A rig must be capable of, and normally employed for, drilling deeper than 3,000 ft. Therefore, some shallow drilling rigs (mostly in the US Northeast) are excluded, but this is necessary to ensure that well-servicing rigs are not counted. • Electric rigs include all those that transmit power from prime movers to electrically driven equipment. • Inland barges include barge-mounted rigs that may be moved from one location to another via canal, bayou or river and that drill in sheltered inland waters. Offshore rigs include stationary platform units (both self-contained and tender-supported), bottom-supported mobile units and floating rigs (both drillships and semisubmersibles). World Oil NOVEMBER 2010
9
US rig census historical data, 1958–2010
UNIT % YEAR AVAILABLE CHANGE CHANGE
ACTIVE
UTIL. RATE
IDLE
DRILLER OPERATOR OWNED OWNED
DEPTH RATING, FT OVER 20,000
16,000– 19,999
13,000– 15,999
10,000– 12,999
1958
2,971
–105
–3%
1,909
64%
1,062
2,735
236
----------141----------
405
487
1959
3,057
86
3%
2,476
81%
581
2,848
209
----------184----------
424
520
1960
3,077
20
1%
2,150
70%
927
2,874
203
----------210----------
378
477
1961
2,774
–303
–10%
2,064
74%
710
2,606
168
----------193----------
356
399
1962
2,555
–219
–8%
1,835
72%
720
2,406
149
----------218----------
307
471
1963
2,781
226
9%
2,002
72%
779
2,672
109
----------272----------
298
479
1964
2,752
–29
–1%
2,048
74%
704
2,644
108
----------305----------
251
463
1965
2,614
–138
–5%
1,934
74%
680
2,531
83
----------322----------
242
449
1966
2,524
–90
–3%
1,714
68%
810
2,472
52
----------350----------
206
461
1967
2,408
–116
–5%
1,573
65%
835
2,359
49
----------375----------
199
435
1968
2,111
–297
–12%
1,508
71%
603
2,067
44
----------372----------
185
381
1969
2,060
–51
–2%
1,649
80%
411
2,033
27
----------366----------
188
352
1970
1,898
–162
–8%
1,331
70%
567
1,869
29
----------343----------
219
322
1971
1,859
–39
–2%
1,308
70%
551
1,832
27
----------361----------
198
329
1972
1,768
–91
–5%
1,381
78%
387
1,741
27
----------397----------
171
301
1973
1,767
–1
0%
1,473
83%
294
1,739
28
----------413----------
164
318
1974
1,894
127
7%
1,769
93%
125
1,881
13
----------425----------
214
339
1975
2,028
134
7%
1,877
93%
151
2,014
14
----------448----------
225
380
1976
2,204
176
9%
1,979
90%
225
2,180
24
----------498----------
239
366
1977
2,482
278
13%
2,399
97%
83
2,451
31
----------577----------
274
461
1978
2,851
369
15%
2,785
98%
66
2,818
33
----------693----------
313
565
1979
3,182
331
12%
2,874
90%
308
3,144
38
----------872----------
350
631
1980
3,672
490
15%
3,542
96%
130
3,626
46
----------1059----------
419
704
1981
4,803
1131
31%
4,703
98%
100
4,762
41
----------1405----------
595
950
1982
5,644
841
18%
3,225
57%
2,419
5,606
38
----------1717----------
717
1104
1983
5,273
–371
–7%
2,539
48%
2,734
5,241
32
----------1639----------
662
993
1984
4,580
–693
–13%
3,090
67%
1,490
4,553
27
----------1408----------
591
933
1985
4,409
–171
–4%
2,625
60%
1,784
4,386
23
----------1332----------
570
894
1986
3,993
–416
–9%
1,052
26%
2,941
3,961
32
----------1220----------
496
789
1987
3,331
–662
–17%
1,388
42%
1,943
3,299
32
----------991----------
427
637
1988
2,752
–579
–17%
1,532
56%
1,220
2,716
36
----------771----------
365
529
1989
2,542
–210
–8%
1,444
57%
1,098
2,508
34
----------704----------
329
515
1990
2,320
–222
–9%
1,677
72%
643
2,294
26
399
221
313
488
1991
2,251
–69
–3%
1,485
66%
766
2,209
42
380
210
304
491
1992
1,996
–255
–11%
1,192
60%
804
1,956
40
315
175
267
441
1993
1,853
–143
–7%
1,279
69%
574
1,806
47
303
152
240
420
1994
1,841
–12
–1%
1,221
66%
620
1,789
52
326
147
245
411
1995
1,729
–112
–6%
1,232
71%
497
1,680
49
317
148
239
393
1996
1,649
–80
–5%
1,263
77%
386
1,597
52
311
139
221
384
1997
1,665
16
1%
1,447
87%
218
1,606
59
339
137
230
387
1998
1,705
40
2%
1,305
77%
400
1,640
65
376
142
238
391
1999
1,644
–61
–4%
860
52%
784
1,599
45
375
134
232
368
2000
1,636
–8
0%
1,215
74%
421
1,557
79
392
134
231
355
2001
1,722
86
5%
1,593
93%
129
1,643
79
424
161
254
373
2002
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2003
1,719
–3
0%
1,334
78%
385
1,648
71
390
205
274
368
2004
1,988
269
16%
1,674
84%
314
1,896
92
424
230
295
473
2005
2,026
38
2%
1,920
95%
106
1,962
64
375
251
311
472
2006
2,298
272
13%
2,200
96%
98
2,191
107
394
287
384
562
2007
2,817
519
23%
2,402
85%
415
2,511
306
453
347
508
658
2008
3,076
259
9%
2,541
83%
535
2,698
378
471
378
605
741
2009
3,169
93
3%
1,264
40%
1,905
2,729
440
478
449
670
754
2010
3,153
–16
–1%
2,024
64%
1,129
2,702
451
517
472
662
721
AVG.
2,632
1,891
74%
742
2,544
88
545
226
340
521
POWER SOURCE 6,000– 9,999
3,000– 5,999
RIG TYPE
MECHANICAL SCR/ELEC. DIESEL GAS STEAM LAND
INLAND BARGE
FLOATING
OFFSHORE BOTTOM OFFSHORE SUBTOTAL PLATFORM SUPPORTED STATIONARY OFFSHORE
1,067
871
49
158
2,715
185
37
----------34----------
34
256
996
933
54
113
2,811
190
34
----------22----------
22
246
1,033
979
73
1,039
1,864
101
2,837
178
39
----------23----------
23
240
937
889
66
1,092
1,549
67
2,535
173
28
----------38----------
38
239
823
736
63
913
1,525
54
2,300
178
41
----------36----------
36
255
964
768
106
1,027
1,600
48
2,514
179
50
----------38----------
38
267
1,029
704
113
1,040
1,577
22
2,479
162
50
----------61----------
61
273
936
665
138
1,051
1,404
21
2,343
144
67
----------60----------
60
271
863
644
164
964
1,376
20
2,259
128
58
----------79----------
79
265
776
623
206
955
1,239
8
2,114
121
72
----------101----------
101
294
680
493
189
882
1,037
3
1,825
114
77
----------95----------
95
286
626
528
177
952
928
3
1,827
98
50
----------85----------
85
233
580
434
154
895
847
2
1,662
106
55
----------75----------
75
236
535
436
170
937
750
2
1,592
124
62
----------81----------
81
267
490
409
176
955
637
0
1,551
77
60
----------80----------
80
217
517
355
164
1,007
596
0
1,570
71
59
----------67----------
67
197
529
397
159
1,200
535
0
1,715
66
54
----------59----------
59
179
579
396
164
1,339
525
0
1,839
74
58
----------57----------
57
189
633
468
192
1,535
476
1
1,964
76
81
----------83----------
83
240
628
542
217
1,943
321
1
2,186
77
120
----------99----------
99
296
723
557
283
2,309
259
0
2,524
91
123
----------113----------
113
327
783
546
420
2,521
241
0
2,802
109
144
----------127----------
127
380
885
605
490
3,023
159
0
3,255
115
34
149
119
268
417
1,080
773
656
4,000
146
1
4,316
161
32
155
139
294
487
1,285
821
896
4,647
100
1
5,139
157
25
167
156
323
505
1,233
746
851
4,344
77
1
4,832
128
31
129
153
282
441
1,077
571
771
3,747
61
1
4,102
131
51
123
173
296
478
1,084
529
748
3,621
40
0
3,940
121
58
107
183
290
469
971
517
815
3,139
39
0
3,573
90
70
89
171
260
420
841
435
681
2,626
24
0
2,956
91
53
77
154
231
375
751
336
561
2,167
24
0
2,429
63
48
62
150
212
323
700
294
498
2,025
19
0
2,249
63
40
60
130
190
293
623
276
408
1,891
21
0
2,061
54
30
46
129
175
259
603
263
438
1,798
15
0
2,006
51
24
48
122
170
245
553
245
395
1,589
12
0
1,809
47
20
41
79
120
187
513
225
380
1,460
13
0
1,660
46
19
36
92
128
193
499
213
418
1,402
21
0
1,613
45
21
39
123
162
228
453
179
414
1,305
10
0
1,500
45
19
43
122
165
229
435
159
408
1,234
7
0
1,425
46
22
39
117
156
224
421
151
456
----------1,209----------
1,428
44
28
42
123
165
237
412
146
497
----------1,208----------
1,449
47
35
45
129
174
256
395
140
499
----------1,145----------
1,384
46
37
45
132
177
260
381
143
520
----------1,116----------
1,370
47
33
42
144
186
266
371
139
582
----------1,140----------
1,452
38
37
43
152
195
270
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
359
123
592
----------1,127----------
1,488
43
36
34
118
152
231
435
131
627
----------1,361----------
1,736
51
45
41
115
156
252
474
143
603
----------1,423----------
1,813
48
37
31
97
128
213
521
150
826
----------1,472----------
2,100
47
42
28
81
109
198
609
242
1,104
----------1,713----------
2,598
55
43
38
83
121
219
621
260
1,170
----------1,906----------
2,871
52
41
39
73
112
205
577
241
1,211
----------1,958----------
2,971
51
43
39
65
104
198
555
226
1,316
----------1,837----------
2,938
55
41
34
85
119
215
701
438
2,354
92
48
66
124
137
278
----------n/a----------
449
2,036
Published in November 2010
The Deep Ocean Ascension drillship on sea trials off the coast of Korea.
NOV Downhole’s 57th Annual Rig Census
US fleet stabilizes as activity rebounds While rig utilization rates continue to climb and newbuilds enter the North American market, other census numbers yield mixed results. Steve Berkman and Tory Stokes, NOV Downhole
Census Highlights Key statistics from the 2010 census include the following: • The US rig fleet had a net drop of just 16 rigs this year, declining less than 1%. This net decrease is the result of 243 rig additions and 259 rig deletions, Fig. 1. • A number of US rigs, 212 units, were retired from active service over the past year. • Newly manufactured rigs, at 131 units, were the largest addition to the US fleet again in 2010. • The total number of US rigs meeting the census definition of “active” increased to 2,024, up 60%, from the 1,264 rigs in 2009.
U.S. Rig Attrition Continues to Increase Rigs are retired from active service when it is no longer profitable to operate the equipment or when newer units replace them. Units that have been destroyed in accidents are also removed from the census. Rigs can also leave the US market for more lucrative ones. All of these rigs are tracked in the annual census as reductions to the fleet. This year’s deletions numbered 259, about 19% higher than last year’s 218 units. Deletions were reported in three categories, Table 1: • Rigs removed from service • Rigs moved out of the country • Destroyed rigs. Rigs removed from service continue to be the largest category of deletions, jumping to 212 units this year, versus 164 in 2009.
Available
5 4
3,153
3 Active
2 1 0
2,024 ’55
’60
’65
’70
’75
’80
’85
’90
’95
Note: 2002 data is an estimate.
Fig. 1. US available vs. active rigs, 1955–2010.
’00
’05
’10
Available rigs, thousands
6
6 Number of rigs, thousands
• US rig utilization rose significantly, up to 64% from 40% last year, Fig. 2. • The number of US rig owners rose by four to 324. • Drilling contractors continue to own 86% of all drilling rigs, with operators owning the remaining 14%. • The Canadian available rig fleet declined to 795 units, down from 852 last year. • Canadian rig activity increased a dramatic 75%, with active rigs climbing to 334 versus 191 in 2009. • Canadian utilization climbed to 42% over the past year after being just 22% in 2009. • The global offshore mobile available fleet expanded by another 6% this year with a net gain of 40 available rigs, primarily due to newbuilds. • Global offshore mobile activity was stable, with active rigs up a single unit to 572. • Utilization for the global offshore mobile fleet was down to 77% from 88% previously. • Most international rig fleets experienced increases in utilization, with the exception of Latin America.
64%
5
100 80
4 3,153
3
60 40
2
Utilization rate, %
The total available rig count was effectively a wash for 2010 despite a dynamic US rig fleet, according to NOV Downhole’s 57th annual rig census (previously known as the ReedHycalog rig census). Newly manufactured and refurbished units were offset by many retiring and dormant rigs over the past year, bringing an end to the last few years’ overall swell in US rigs. Commodity prices have made a comeback since last year’s dismal showing, causing activity to rebound somewhat and resulting in a tightening of US fleet utilization in 2010. Canada experienced a sizeable drop in availability this year, but did show a considerable jump in active rigs. The global offshore mobile fleet numbers were the reverse, however, with available rigs climbing while activity remained stagnant. In order to compile a complete picture of the worldwide rig market, NOV Downhole works closely with several companies to pull together industry statistics. RigData and ODSPetrodata provide detailed information regarding the US land and global offshore mobile rig fleets. The Canadian figures are provided by NOV Downhole personnel in Calgary along with Nickle’s Energy Group. Summarized data regarding the international land rig fleet are collected by NOV Downhole regional managers and submitted annually for this article.
20 1 ’55 ’60 ’65 ’70 ’75 ’80 ’85 ’90 ’95 ’00 ’05 ’10 Note: 2002 data is an estimate.
Fig. 2. US available rigs vs. utilization, 1955–2010. World Oil NOVEMBER 2010
3
NOV Downhole’s 57th Annual Rig Census
Table 1. Changes in the available US fleet 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 Previous year’s fleet 3,169 3,076 2,817 2,298 2,026 1,988 1,719 1,722 1,722 1,636 1,644 1,705 1,665 1,649 1,729 1,841 1,853 1,996 2,251 2,320 2,542 2,752 3,331 Reductions to fleet Removed from service -212 -164 -59 -77 -99 -141 -68 -123 n/a -87 -76 -89 -59 -103 -114 -162 -122 -208 -269 -193 -353 -323 -796 Moved out of the country -45 -49 -29 -14 -14 -29 -1 -45 n/a -6 -4 -7 -10 -18 -24 -30 -21 -16 -46 -38 -23 -23 -22 Destroyed -2 -5 0 -4 -6 -3 0 -4 n/a -3 -2 -4 -3 -6 -3 -3 -5 -8 -7 -21 -6 -28 -17 Subtotal deletions -259 -218 -88 -95 -119 -173 -69 -172 n/a -96 -82 -100 -72 -127 -141 -195 -148 -232 -322 -252 -382 -374 -835 Additions to fleet
Newly manufactured 131 237 202 349 238 23 32 48 n/a 9 6 6 7 2 3 0 2 1 3 0 0 1 8 Brought back into service 87 36 101 189 95 124 125 37 n/a 56 22 18 37 72 33 38 68 63 59 138 116 111 226 Moved into the country 16 30 13 5 5 6 7 10 n/a 12 12 6 6 12 1 10 24 12 1 2 4 2 0 Assembled from parts 9 8 31 71 53 58 79 74 n/a 105 34 9 62 57 24 35 42 13 4 43 40 50 22 Newly identified* - - - - - - 95 - - - - - - - - - - - - - - - Subtotal additions 243 311 347 614 391 211 243 169 0 182 74 39 112 143 61 83 136 89 67 183 160 164 256 Net change -16 93 259 519 272 38 174 -3 n/a 86 -8 -61 40 16 -80 -112 -12 -143 -255 -69 -222 -210 -579 Total available rigs 3,153 3,169 3,076 2,817 2,298 2,026 1,893 1,719 n/a 1,722 1,636 1,644 1,705 1,665 1,649 1,729 1,841 1,853 1,996 2,251 2,320 2,542 2,752
Number of available rigs
*2004 adjustment made in conjuction with RigData.
1,200 1,000 800 600 400 200 0 -200 -400 -600 Note: 2002 data is an estimate. -800 ’55 ’60 ’65 ’70 ’75 ’80
-16
’85
’90
’95
’00
’05
’10
Fig. 3. US change in available rigs, 1955–2010.
Census rules exclude rigs from the available count that have been stacked for a significant amount of time, require a large capital expenditure to be operable, or have been auctioned for parts or cannibalized to keep other rigs running. The US fleet has been experiencing a building boom for the last several years, which has diminished the demand for many of the older units. Since activity has picked up recently, there are many rigs leaving the fleet in order to be refurbished. Others are simply being stacked until economic conditions warrant their reactivation. Rigs are tracked in the census each year as they move into and out of the country. In this year’s count, 45 rigs were noted as moving out of the US, a slight decrease from the 49 rigs that moved out last year. The destination of some of these rigs is known, and it appears that a large portion have relocated to Mexico. Rig movement into the US is covered below. Just two rigs were counted as destroyed for the US in the 2010 census. Much has been published about the recent offshore disaster that affected one offshore unit. A land unit was also reported as damaged beyond repair during the time period since the last census was taken. U.S. Rig Additions Rig-building programs continue to turn out new units that increase the size of the US available fleet. Newbuilds have been the primary way owners have maintained their fleets over the past several years, although there are also refurbished and reacti4
NOVEMBER 2010 World Oil
vated units that supplement their businesses as well. The census reports that the US fleet added 243 rigs overall during the past year, down 22% from the 311 units gained in 2009. These 243 rigs added did not completely offset the total reductions of 259 units. Fleet additions fall into one of four categories, Table 1: • Newly manufactured rigs • Rigs brought back into service • Rigs moved into the country • Rigs assembled from parts. The rapid fleet expansion of the past five years due to newly manufactured units is starting to slow. Newbuilds are still coming online at a brisk pace and remain the primary reason for expansion, but have dropped significantly in 2010. Another 131 units were built from scratch this year, down from 237 last year. The total number of newbuilds added over the past five years is now 1,157, indicating that 37% of the total US fleet is less than five years old. Of the 131 new units, 120 were land rigs, seven were floating and four were bottom supported. The number of US rigs brought back into service jumped this year to 87 units. This is more than double the 36 units that were reactivated in the 2009 census. Note that each of these reactivations had been counted in previous census tabulations, but had been subsequently removed due to becoming inactive or inoperable. These rigs were refurbished or reactivated over the past year and have now reentered the available fleet. Apparently, the increase in activity, coupled with the slowdown of newly manufactured units, has prompted companies to reactivate rigs in response to current work or future prospects. Just 16 rigs were moved into the country over the past year, versus 30 in 2009. As is often the case, many of these rigs came from Mexico. Considering that 45 rigs moved out of the US for the 2010 census, while 16 moved in, there was a net decline of 29 units resulting from rig moves. It has been a tendency over the past six years that more rigs are leaving the US than are entering. Furthermore, if offshore permitting remains slow due to new regulations following the end of the deepwater moratorium, this trend is expected to continue. Just nine rigs assembled from parts were added to the fleet this year. This is similar to the eight units last year. In recent years, many more rigs have been newly constructed in total or refurbished than put together from cannibalized units.
Total rig additions numbered 243, while deletions totaled 259. The net change in the fleet over the past year was just a 16-unit decrease, showing overall fleet stability and a decline of less than 1%, Fig. 3. Canadian Fleet Continues to Shrink Beginning with the 2009 census, market conditions caused the Canadian fleet to contract in size. A few reactivated and new units do continue to come online in Canada. However, despite increasing demand this year, a significant number of rigs are being removed from service after sitting idle for several years. The overall count of available Canadian rigs fell by 57 this year. Using data supplied by Nickle’s Energy Group and NOV Downhole personnel, we determined that newly manufactured units totaled about half of last year’s 29. Newbuilds are no longer the primary way rigs are added to the fleet. Rigs brought back into service tallied 35 units this year, significantly more than the number seen for the last several years. There were also four units that moved into the country. No rigs were recognized as assembled from parts. Total rig additions came to 54 units overall for Canada. As mentioned previously, the foremost cause of the decline in the Canadian fleet this year was due to rigs removed from service. A considerable number, 94 units, were taken out of the census based on information gleaned regarding their operational or stacked status. This is more than double the 42 that were retired last year. Furthermore, 17 rigs left Canada over the past year to relocate to other countries. This compares to 42 that moved out last year. Fortunately, no Canadian units were reported as destroyed over the past year. Deletions numbered in total 111 units. Overall, Canada saw a decline of 57 units and an available count of 795, a drop of 7%, Table 2. Global Offshore Mobile Fleet Continues to Expand The global offshore mobile rig fleet continued to experience growth this year, predominantly due to newly manufactured units. Forty rigs counted as brand new were added to the fleet for 2010. This is similar to the 43 new units included in the 2009 census. Besides these newbuilds, six offshore rigs were also reactivated this year. ODS-Petrodata, which assisted in pulling together census figures, estimates that about 66 brand new units are scheduled for worldwide delivery by the time the 2011 census rolls around next spring, although some inevitably Table 2. Changes to the Canadian rig fleet 2010 2009 2008 2007 Previous year’s fleet 852 875 871 799 Reductions to fleet
Removed from service -94 -17 -24 -6 Moved out of the country -17 -42 -19 -10 Destroyed 0 0 -1 0 Subtotal deletions -111 -59 -44 -16 Additions to fleet
Brought back into service 35 2 1 0 Newly manufactured 15 29 47 86 Moved into the country 4 5 0 0 Assembled from parts 0 0 0 2 Subtotal additions 54 36 48 88 Net change -57 -23 4 72
2006 741 -7 -8 0 -15 0 63 0 10 73
58 Total available rigs 795 852 875 871 799 Total active rigs 334 191 406 371 669 Utilization 42% 22% 46% 43% 84%
will not meet that timetable. No new offshore rigs entering the fleet this year were described as assembled from parts. Overall reductions to the global offshore mobile fleet numbered just six this year, a decline from the 14 removed from the census in 2009. Four units were taken out of the census due to being damaged beyond repair, while two were removed from service due to age or inactivity, Table 3. If a rig has not worked for more than five years and does not have upcoming contracts, it is generally not classified as available. This is the case since it would usually take a significant capital expenditure in order to put the rig back into working condition. Therefore, these drilling units cannot be counted as available by census rules, although a few may later be reactivated if market conditions warrant it. Note that since platform and inland barges are particularly difficult to track, they are not included. Overall, the available count for global offshore mobile units stands at 745 units, a net increase of 40 rigs, a 6% jump. The fleet is widely distributed with the US and Middle East dominating, followed by Southeast Asia and South America, Fig. 4. The makeup of the fleet by rig type is shown in Fig. 5. U.S. Activity Rebounds Dire market conditions due to the US recession caused the rig count to plummet in 2009, marking the second-steepest decline in the 57-year history of the census. Now, a year later, oil and gas prices have recovered somewhat and rigs have been going back to work. The active rig count jumped 60% for 2010 to 2,024 after being at 1,264 a year ago. Although not yet back to 2008 levels, major improvement is being made. There are several reported active rig counts in the industry, and the methodology used to count active rigs for the NOV Downhole census is different from most. This census counts a rig as active if it has “turned to the right” at any time during a defined 45-day period. For 2010, this was between May 5 and June 18. Therefore, since a longer time period is used to monitor activity, the NOV Downhole statistic will always be higher than other reported weekly rig counts. Rig utilization, the ratio of active to available rigs, is an often-quoted industry statistic and can indicate the health of the industry. Last year’s depressed activity level pushed US utilization down to just 40%, a level not seen since the late 1980s. This year’s semi-recovery brought utilization up to 64%—not a high number, but a significant improvement. Med./Black Other* Sea 5% 3% Far East 5% Mexico 5%
US Gulf 16%
Indian Ocean 6%
Middle East 16%
South America 12% West Africa 8%
NW Europe 10% SE Asia 13%
*Total of regions with less than 3% each include: Australia/New Zealand, Baltic, Canada, Caspian, Central America and Russian Arctic.
Fig. 4. Global offshore mobile fleet by region in 2010. World Oil NOVEMBER 2010
5
NOV Downhole’s 57th Annual Rig Census
Submersibles* 7 rigs 14% util. Drill barges Semisubmersibles 24 rigs 185 rigs 88% util. 83% util.
Tenders 28 rigs 82% util.
Jackups 451 rigs 74% util.
*Arctic rigs are included with submersibles.
Drillships 50 rigs 80% util.
Total utilization = 77% Total rigs = 745
Fig. 5. Makeup of the global offshore mobile fleet in 2010.
Table 3. Changes to the global offshore mobile fleet 2010 2009 2008 2007 Previous year’s fleet 705 675 650 654 Reductions to fleet Destroyed -4 -3 0 0 Removed from service -2 -11 -7 -26 Subtotal deletions -6 -14 -7 -26 Additions to fleet
2006 641 -6 -10 -16
Newly manufactured 40 43 28 11 9 Brought back into service 6 1 4 11 20 Assembled from parts 0 0 0 0 0 Subtotal additions 46 44 32 22 29 Net change 40 30 25 -4 13 Total available rigs 745 705 675 650 654 Total active rigs 572 571 592 574 557 Utilization 77% 81% 88% 88% 85%
There were 1,129 available US rigs that were not working during the 2010 census period. Some of these idle rigs may have been under contract and waiting for the start of their projects or being moved to their next drilling locations. Rigs stacked less than one year numbered 345; one to two years, 722; and two to three years, 62. Aging rules of the census state that any rig stacked for longer than three years will be removed from the available fleet. However, most rigs tend to be decommissioned before then. Rigs that fall into this category and are removed from the fleet because they are no longer economically viable fall into the group removed from service. Full-year utilization, the percentage of available rigs that drilled sometime during the past year, gives a slightly different picture. Adding the 345 rigs stacked less than one year to the 2,024 active units in the census provides the number of rigs that drilled during the past year. This full-year utilization figure indicates that rig owners used 2,369 units, or 75% of available rigs over the past year. This statistic is considerably lower than usual and shows that there is still a lot of oversupply since rig demand is not yet close to what it was two years ago. For 2010, every US region except for Alaska experienced a rise in rig activity. The regional breakdown, comparing this year’s numbers to last, is shown in Table 4. The ArkLaTex region continues to show the highest overall number of active rigs with 389, a 132-unit increase from the previous year. Utilization by region shows results consistent with activity levels, with all regions having increases except for Alaska. Examining US land and offshore rigs independently, gross utilization for land rigs was up by about a quarter to 65% from 39% in 2009, Table 5. The US marine fleet also showed some improvement this year, with offshore utilization climbing to 59% after being 55% last year. Demand does vary by rig type, with floating rigs remaining in greatest demand at 73% utilization. Rigs experiencing the lowest level of utilization are now the offshore platform units, at 50%. The total US rig fleet was also analyzed by depth capacity, revealing a bump in utilization for units in every depth range, Table 6.
Table 4. US regional census results Power source Rig type Ownership SCR/ Bottom Total Region Year Available Active Utilization Driller Operator Mechanical electric Land Barge Floating Platform supported offshore Alaska 2010 26 13 50% 25 1 8 18 26 0 0 0 0 0 2009 27 14 52% 27 0 9 18 27 0 0 0 0 0 Northern 2010 208 150 72% 190 18 109 99 208 0 0 0 0 0 Rockies 2009 166 52 31% 155 11 117 49 166 0 0 0 0 0 Southern 2010 354 205 58% 298 56 221 133 354 0 0 0 0 0 Rockies 2009 409 146 36% 347 62 245 164 409 0 0 0 0 0 Northeast 2010 319 188 59% 269 50 271 48 319 0 0 0 0 0 States 2009 274 139 51% 219 55 256 18 274 0 0 0 0 0 Permian 2010 415 314 76% 365 50 356 59 415 0 0 0 0 0 Basin 2009 417 130 31% 381 36 348 69 417 0 0 0 0 0 Gulf Coast 2010 369 242 66% 337 32 157 212 349 5 2 0 13 20 2009 386 174 45% 347 39 210 176 369 5 2 1 9 17 ArkLaTex 2010 598 389 65% 513 85 277 321 598 0 0 0 0 0 2009 612 257 42% 542 70 329 283 612 0 0 0 0 0 California 2010 92 59 64% 78 14 52 40 91 0 0 1 0 1 2009 93 40 43% 77 16 58 35 92 0 0 1 0 1 Southeast 2010 297 188 63% 283 14 85 212 103 50 39 33 72 194 States 2009 263 127 48% 252 11 72 191 83 46 41 37 56 180 Mid- 2010 475 276 58% 344 131 301 174 475 0 0 0 0 0 Continent 2009 522 185 35% 382 140 348 174 522 0 0 0 0 0 Total 2010 3,153 2,024 64% 2,702 451 1,837 1,316 2,938 55 41 34 85 215 2009 3,169 1,264 40% 2,729 440 1,958 1,211 2,971 51 43 39 65 198 6
NOVEMBER 2010 World Oil
Global Offshore Activity Flat The global offshore mobile fleet was essentially unchanged during the census window for 2010. Total working Table 5. US land rigs, number and utilization Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Available rigs 2,429 2,249 2,061 2,006 1,809 1,660 1,613 1,501 1,425 1,428 1,449 1,384 1,370 1,452 n/a 1,488 1,736 1,813 2,100 2,598 2,871 2,971 2,938
Active rigs 1,289 1,242 1,472 1,306 1,089 1,120 1,049 1,047 1,071 1,235 1,092 699 1,006 1,350 n/a 1,160 1,496 1,729 2,008 2,222 2,365 1,156 1,897
Utilization 53% 55% 71% 65% 60% 67% 65% 70% 75% 86% 75% 51% 73% 93% n/a 78% 86% 95% 96% 86% 82% 39% 65%
Other U.S. Industry Trends Strong commodity prices in recent years have prompted new drilling companies to form. Since 2004, the net number of new businesses entering the US census has typically increased annually, with the exception of 2009, when the overall total dropped by just one. This year, after all the new companies were added and those ceasing operations were deleted, the total number rose by four to 324, Fig. 9. Census statistics also track the ownership of rigs by the type of owner. There have always been many more rigs in the possession of drilling contractors as opposed to operators, although the number of operator-owned rigs has generally risen. This year, however, no change has occurred and operators continue to own about 14% of the overall US fleet, or 451 rigs. Drilling contractors own the remaining 86%, or 2,702 rigs. Another way to get a sense of US rig ownership is by examining the fleet sizes of companies and looking at the trend over the years. Rig ownership by fleet size has been compared since 1993, when consolidation really began increasing. In more recent years, there have only been slight fluctuations in this area. This year, the largest companies continue to hold about 62% of the total fleet. One difference, though, is that there has been a slight switch in percentages for companies holding two to five rigs and those having six to ten rigs, with the smaller companies gaining rigs overall and the larger companies downsizing, Fig. 10. 1,000 875 871 852 900 799 795 741 800 Available 680 669 700 640 653 600 Active 450 500 406 550 400 334 449 191 371 300 346 200 100 2002 2003 2004 2005 2006 2007 2008 2009 2010
Number of rigs
global Land Rig Utilization Tightens Utilization rates have been tracked for the past four years for the primary international regions. After a decline in 2009, most areas experienced utilization increases for 2010. The overall rate has risen to 88% from 84% in 2009, Table 7. Regarding individual regions, Europe’s rise in utilization this year was mostly due to increases in FSU activity. Africa, having had the lowest rate at 70% last year, has shown some recovery and is now at 77%. Libya and Nigeria, which battle with security issues, still have a number of idle rigs and kept this percentage from rising further. Latin America was the only region reporting a utilization drop for 2010. The source of this weakness was Mexico, where Pemex activity has slowed significantly. Note that some international areas have large numbers of available rigs, but these units are typically of older technology and may not be universally mobile or marketable. Also, in some cases, available rigs are actually under contract awaiting a project start, and are realistically unavailable for other work.
rigs numbered 572 during the spring 45-day active period (May 5 to June 18), up just one rig from 2009. This count includes all offshore mobile units, with the exception of platform and inland barge rigs. With rig supply increasing while rig demand remains stagnant, utilization dropped to 77% from 88%, Fig. 8.
Fig. 6. Canada available vs. active rigs, 2002–2010.
400 350 Number of rigs
Canadian Activity Begins to Rebound Canada experienced a considerable increase in rig activity for 2010. Although there have been several ups and downs since Canada was included in the census in 2005, last year’s activity was the lowest noted, with just 191 active rigs for the spring 45-day window. Market volatility continues, with the active count bouncing back somewhat to 334 rigs, an increase of 75%. With available rigs declining and active rigs increasing, Canadian utilization figures have improved for 2010, rising to 42% from a low of 22% last year, to reach essentially the level of 2007 and 2008, Fig. 6. Regarding Canadian drilling capacity, almost 40% of Canada’s rigs lie in the 6,000–9,999-ft range. Fleet availability and activity by depth capacity show that utilization is now highest in the 10,000–12,999-ft range (55%) and lowest in the 3,000–5,999-ft range (22%), Fig. 7.
300
Idle Active
250 200 150 100 50 0
> 20,000 16,000 13,000 10,000 6,000 ft. to 19,999 to 15,999 to 12,999 to 9,999 Depth, ft
3,000 to 5,999
Fig. 7. Canadian rigs by depth capacity 2010. World Oil NOVEMBER 2010
7
NOV Downhole’s 57th Annual Rig Census
Table 6. US rig utilization by depth capacity Depth rating, ft Over 16,000 to 13,000 to 10,000 to 6,000 to 3,000 to Region Status 20,000 19,999 15,999 12,999 9,999 5,999 Total Alaska Available 10 0 8 6 1 1 26 Active 4 0 4 5 0 0 13 Idle 6 0 4 1 1 1 13 Utilization 40% - 50% 83% 0% 0% 50% Northern Available 27 66 50 40 9 16 208 Rockies Active 24 58 42 13 5 8 150 Idle 3 8 8 27 4 8 58 Utilization 89% 88% 84% 33% 56% 50% 72% Southern Available 16 31 87 94 87 39 354 Rockies Active 10 16 60 39 55 25 205 Idle 6 15 27 55 32 14 149 Utilization 63% 52% 69% 41% 63% 64% 58% Northeast Available 1 15 38 47 160 58 319 States Active 1 15 32 38 74 28 188 Idle 0 0 6 9 86 30 131 Utilization 100% 100% 84% 81% 46% 48% 59% Permian Available 22 31 97 170 83 12 415 Basin Active 7 26 72 143 62 4 314 Idle 15 5 25 27 21 8 101 Utilization 32% 84% 74% 84% 75% 33% 76% Gulf Coast Available 106 63 79 59 47 15 369 Active 79 51 41 39 28 4 242 Idle 27 12 38 20 19 11 127 Utilization 75% 81% 52% 66% 60% 27% 66% ArkLaTex Available 72 140 168 133 61 24 598 Active 58 124 96 59 38 14 389 Idle 14 16 72 74 23 10 209 Utilization 81% 89% 57% 44% 62% 58% 65% California Available 5 11 13 21 18 24 92 Active 3 10 7 13 10 16 59 Idle 2 1 6 8 8 8 33 Utilization 60% 91% 54% 62% 56% 67% 64% Southeast Available 186 26 31 32 14 8 297 States Active 111 17 20 24 10 6 188 Idle 75 9 11 8 4 2 109 Utilization 60% 65% 65% 75% 71% 75% 63% Mid- Available 72 89 91 119 75 29 475 Continent Active 57 68 41 55 40 15 276 Idle 15 21 50 64 35 14 199 Utilization 79% 76% 45% 46% 53% 52% 58% Rig type Inland Available barge Active Idle Utilization Floating Available Active Idle Utilization Land Available Active Idle Utilization Offshore Available platform Active Idle Utilization Bottom Available supported Active Idle Utilization Totals Available Active Idle Utilization
8
32 14 18 44% 41 30 11 73% 349 255 94 73% 17 9 8 53% 78 46 32 59% 517 354 163 68%
NOVEMBER 2010 World Oil
2 2 0 100% 0 0 0 - 461 380 81 82% 7 2 5 29% 2 1 1 50% 472 385 87 82%
8 5 3 63% 0 0 0 - 647 408 239 63% 4 1 3 25% 3 1 2 33% 662 415 247 63%
7 5 2 71% 0 0 0 - 710 420 290 59% 2 2 0 100% 2 1 1 50% 721 428 293 59%
4 3 1 75% 0 0 0 - 548 316 232 58% 3 3 0 100% 0 0 0 - 555 322 233 58%
2 2 0 100% 0 0 0 - 223 118 105 53% 1 0 1 0% 0 0 0 - 226 120 106 53%
55 31 24 56% 41 30 11 73% 2,938 1,897 1,041 65% 34 17 17 50% 85 49 36 58% 3,153 2,024 1,129 64%
Contractors WORRY about Rig Rates Most US and several Canadian drilling contractors have been surveyed for the past 20 years regarding their business direction and their opinions of the industry. These professionals continue to shed new light on overall industry concerns and future projections. Eighteen contractors participated in this year’s survey, owning a total of 710 rigs. These companies predominately operate in the US, but a few Canadian companies also participated. These companies represented a wide variety in both company size and regional areas. For the survey, contractors are asked to rank some key issues based on their level of importance and estimate a number of changes to their business, both past and anticipated. Rig rates are often the top concern of contractors, and this year is no different. Although drilling activity has picked up, there is still a wide gap between rig demand and supply. This apparently has kept rig rates from climbing to acceptable levels for many contractors. Another issue brought to light again by the survey is the problem of crew availability. Even though crew concern had dropped to tying with insurance costs as the No. 3 concern last year, it has risen to No. 2 and will probably always be a struggle for companies attempting to man their rigs. Government regulations, the No. 2 concern last year, dropped to No. 3 for 2010. There continues to be apprehension about regulatory changes over the next several years. This was especially pushed to the forefront after the recent Gulf of Mexico rig disaster and subsequent deepwater moratorium, which ended in early October. According to survey respondents, land rig rates in actual dollars have averaged $13,282/day during May– June 2010. Reflecting the climb in activity, labor rates for contractors have also begun increasing again, and were up 3% on average since last year. Maintenance expenses are up again as well, rising 9% for 2010. Climbing rig maintenance is a logical consequence of more units being refurbished and put back into service. Contractors responding to our survey indicated that their rig activity has gone up 26% on average for 2010. This is considerably lower than the overall industry increase of 60% for the census this year. However, there has apparently been enough improvement to warrant some optimism, since a greater number of contractors are expecting more promising times ahead for the drilling contracting industry during the next two years. Many foresee technology and specialty rigs making an impact in the near future. Despite some optimism, there is also a lot of uncertainty, and the survey suggests that many have a “wait and see” attitude, especially regarding government regulation. Overall, contractors’ estimates about their future business expectations vary widely, but on the average they expect a modest climb of 5% over the coming year. Contractors were asked how changes in oil and gas prices would affect their businesses. When asked what prices would cause them to raise their activity from its current level, the average reply was $86.30/bbl for oil and $6.50/Mcf for gas. When asked what prices would cause them to lower their activity level, the average answer was $53.90/bbl for oil and $3.70/Mcf for gas. As of this writing, prices are still hovering within those
Number of rigs
800 700 670
677
600
Available
678
500 400 488
673
650
545
557
574
Active
479
460
641
654
486
675
705
592
571
745 572
300 200 100 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fig. 8. Global offshore mobile available vs. active rigs, 2001–2010.
Number of rig owners
690 609
600
558 497
500
460
400
412
388 361 316
300
289 270
200 100 0
’88
’90
’92
’94
’96
240 219
’98
208 191185 179
213 226
’00
’04
’02
324 310 321 320
257
’06
’08
’10
Note: 2002 data is an estimate.
Fig. 9. US rig owners, 1987–2010.
Table 7. International utilization
2006
2007
Utilization 2008
2009
2010
Europe incl. FSU Africa Middle East Asia incl. China Latin America Overall
96% 99% 88% 97% 92% 95%
97% 86% 94% 95% 90% 94%
90% 85% 94% 96% 90% 92%
78% 70% 82% 93% 81% 84%
86% 77% 90% 96% 74% 88%
Total rig fleet, %
100 90 80 70 60 50 40 30 20 10 0
7
6
5
5
5
23 22 28 26 26
20 21 19
25 22 22
29 20 25 28
’93
’95
4
4
4
4
4
3 3 4 4 3 3 3 3 10 13 18 17 16 13 13 13 14 13 14 14 12
10 10 11 12 12 11 13 13 14 11 12 10 10 11 11 10 11 11 11 12 15 13 10 12 19 18 16 15 24
1 rig 2–5 rigs 6–10 rigs 11–20 rigs > 20 rigs
18 50 54
58 62 62 63 60 55 58 61 60 62 62
37
’97
U.S. Forecast for 2011 Stagnation will again characterize the industry for the 2011 census period. Some new rig rollouts will continue over the next year but will again be countered by retiring units, so large increases in available rigs are not likely. Due to the existing political and economic situation, activity may not climb much higher either. A waiting game seems to be in the cards for the drilling industry’s near future. WO Acknowledgments The following are recognized for their contributions to this year’s rig census: Michael Wayne (RigData); Tom Kellock (ODS–Petrodata); Diane Henderson (Nickle’s Energy Group); Leonora Compton, Wade Dannhaus, Amy Dismore and Dave Macneil (NOV Downhole).
800 700
that they have no plans for change. Very few companies mentioned that they were planning to downsize, diversify, merge or explore international opportunities.
’99
’01
’03
’05
’07
’09
Note: 2002 data not available.
Fig. 10. US rig ownership by fleet size, 1993–2010.
ranges, so it doesn’t appear that most contractors will be changing their business direction based on commodity prices alone during the near future. Many contractors are optimistic enough about the market to have expansion strategies for the future. When asked to describe their company’s plans for the next five years, the largest percentage of survey respondents, 44%, said they are preparing to increase their fleets. The second largest group, 43%, tells us
The Authors Steve Berkman has been the Director of Strategic Marketing for NOV Downhole since January 2009. Prior to that, he had been Marketing Manager for ReedHycalog since July 2004. He began with ReedHycalog over 27 years ago—starting as a Design Engineer in 1982. Mr. Berkman has been all over the world in various engineering and sales positions. He received a BS degree in mechanical engineering from the University of Texas. Tory A. Stokes is a consultant for NOV Downhole, having previously been employed by ReedHycalog as Senior Marketing Analyst for eight years. She graduated with a BS degree in applied mathematics from Texas A&M University in 1985, and earned an MBA from the University of Houston in 1993.
Census Ground Rules • Company sales regions were used for the geographical breakdown in Table 4. • Contractor-owned rigs are those belonging to companies whose primary business is offering drilling contracting services. • To be considered active, a rig must be drilling at least one day during the 45-day qualification period. • Only workable rotary rigs are included; cable tool rigs are not. • To be considered available, a rig must be able to go to work without requiring a significant capital expenditure. • Rotary rigs stacked for an extended period of time, typically three years or longer, are not counted as available. • A rig must be capable of, and normally employed for, drilling deeper than 3,000 ft. Therefore, some shallow drilling rigs (mostly in the US Northeast) are excluded, but this is necessary to ensure that well-servicing rigs are not counted. • Electric rigs include all those that transmit power from prime movers to electrically driven equipment. • Inland barges include barge-mounted rigs that may be moved from one location to another via canal, bayou or river and that drill in sheltered inland waters. Offshore rigs include stationary platform units (both self-contained and tender-supported), bottom-supported mobile units and floating rigs (both drillships and semisubmersibles). World Oil NOVEMBER 2010
9
US rig census historical data, 1958–2010
UNIT % YEAR AVAILABLE CHANGE CHANGE
ACTIVE
UTIL. RATE
IDLE
DRILLER OPERATOR OWNED OWNED
DEPTH RATING, FT OVER 20,000
16,000– 19,999
13,000– 15,999
10,000– 12,999
1958
2,971
–105
–3%
1,909
64%
1,062
2,735
236
----------141----------
405
487
1959
3,057
86
3%
2,476
81%
581
2,848
209
----------184----------
424
520
1960
3,077
20
1%
2,150
70%
927
2,874
203
----------210----------
378
477
1961
2,774
–303
–10%
2,064
74%
710
2,606
168
----------193----------
356
399
1962
2,555
–219
–8%
1,835
72%
720
2,406
149
----------218----------
307
471
1963
2,781
226
9%
2,002
72%
779
2,672
109
----------272----------
298
479
1964
2,752
–29
–1%
2,048
74%
704
2,644
108
----------305----------
251
463
1965
2,614
–138
–5%
1,934
74%
680
2,531
83
----------322----------
242
449
1966
2,524
–90
–3%
1,714
68%
810
2,472
52
----------350----------
206
461
1967
2,408
–116
–5%
1,573
65%
835
2,359
49
----------375----------
199
435
1968
2,111
–297
–12%
1,508
71%
603
2,067
44
----------372----------
185
381
1969
2,060
–51
–2%
1,649
80%
411
2,033
27
----------366----------
188
352
1970
1,898
–162
–8%
1,331
70%
567
1,869
29
----------343----------
219
322
1971
1,859
–39
–2%
1,308
70%
551
1,832
27
----------361----------
198
329
1972
1,768
–91
–5%
1,381
78%
387
1,741
27
----------397----------
171
301
1973
1,767
–1
0%
1,473
83%
294
1,739
28
----------413----------
164
318
1974
1,894
127
7%
1,769
93%
125
1,881
13
----------425----------
214
339
1975
2,028
134
7%
1,877
93%
151
2,014
14
----------448----------
225
380
1976
2,204
176
9%
1,979
90%
225
2,180
24
----------498----------
239
366
1977
2,482
278
13%
2,399
97%
83
2,451
31
----------577----------
274
461
1978
2,851
369
15%
2,785
98%
66
2,818
33
----------693----------
313
565
1979
3,182
331
12%
2,874
90%
308
3,144
38
----------872----------
350
631
1980
3,672
490
15%
3,542
96%
130
3,626
46
----------1059----------
419
704
1981
4,803
1131
31%
4,703
98%
100
4,762
41
----------1405----------
595
950
1982
5,644
841
18%
3,225
57%
2,419
5,606
38
----------1717----------
717
1104
1983
5,273
–371
–7%
2,539
48%
2,734
5,241
32
----------1639----------
662
993
1984
4,580
–693
–13%
3,090
67%
1,490
4,553
27
----------1408----------
591
933
1985
4,409
–171
–4%
2,625
60%
1,784
4,386
23
----------1332----------
570
894
1986
3,993
–416
–9%
1,052
26%
2,941
3,961
32
----------1220----------
496
789
1987
3,331
–662
–17%
1,388
42%
1,943
3,299
32
----------991----------
427
637
1988
2,752
–579
–17%
1,532
56%
1,220
2,716
36
----------771----------
365
529
1989
2,542
–210
–8%
1,444
57%
1,098
2,508
34
----------704----------
329
515
1990
2,320
–222
–9%
1,677
72%
643
2,294
26
399
221
313
488
1991
2,251
–69
–3%
1,485
66%
766
2,209
42
380
210
304
491
1992
1,996
–255
–11%
1,192
60%
804
1,956
40
315
175
267
441
1993
1,853
–143
–7%
1,279
69%
574
1,806
47
303
152
240
420
1994
1,841
–12
–1%
1,221
66%
620
1,789
52
326
147
245
411
1995
1,729
–112
–6%
1,232
71%
497
1,680
49
317
148
239
393
1996
1,649
–80
–5%
1,263
77%
386
1,597
52
311
139
221
384
1997
1,665
16
1%
1,447
87%
218
1,606
59
339
137
230
387
1998
1,705
40
2%
1,305
77%
400
1,640
65
376
142
238
391
1999
1,644
–61
–4%
860
52%
784
1,599
45
375
134
232
368
2000
1,636
–8
0%
1,215
74%
421
1,557
79
392
134
231
355
2001
1,722
86
5%
1,593
93%
129
1,643
79
424
161
254
373
2002
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2003
1,719
–3
0%
1,334
78%
385
1,648
71
390
205
274
368
2004
1,988
269
16%
1,674
84%
314
1,896
92
424
230
295
473
2005
2,026
38
2%
1,920
95%
106
1,962
64
375
251
311
472
2006
2,298
272
13%
2,200
96%
98
2,191
107
394
287
384
562
2007
2,817
519
23%
2,402
85%
415
2,511
306
453
347
508
658
2008
3,076
259
9%
2,541
83%
535
2,698
378
471
378
605
741
2009
3,169
93
3%
1,264
40%
1,905
2,729
440
478
449
670
754
2010
3,153
–16
–1%
2,024
64%
1,129
2,702
451
517
472
662
721
AVG.
2,632
1,891
74%
742
2,544
88
545
226
340
521
POWER SOURCE 6,000– 9,999
3,000– 5,999
RIG TYPE
MECHANICAL SCR/ELEC. DIESEL GAS STEAM LAND
INLAND BARGE
FLOATING
OFFSHORE BOTTOM OFFSHORE SUBTOTAL PLATFORM SUPPORTED STATIONARY OFFSHORE
1,067
871
49
158
2,715
185
37
----------34----------
34
256
996
933
54
113
2,811
190
34
----------22----------
22
246
1,033
979
73
1,039
1,864
101
2,837
178
39
----------23----------
23
240
937
889
66
1,092
1,549
67
2,535
173
28
----------38----------
38
239
823
736
63
913
1,525
54
2,300
178
41
----------36----------
36
255
964
768
106
1,027
1,600
48
2,514
179
50
----------38----------
38
267
1,029
704
113
1,040
1,577
22
2,479
162
50
----------61----------
61
273
936
665
138
1,051
1,404
21
2,343
144
67
----------60----------
60
271
863
644
164
964
1,376
20
2,259
128
58
----------79----------
79
265
776
623
206
955
1,239
8
2,114
121
72
----------101----------
101
294
680
493
189
882
1,037
3
1,825
114
77
----------95----------
95
286
626
528
177
952
928
3
1,827
98
50
----------85----------
85
233
580
434
154
895
847
2
1,662
106
55
----------75----------
75
236
535
436
170
937
750
2
1,592
124
62
----------81----------
81
267
490
409
176
955
637
0
1,551
77
60
----------80----------
80
217
517
355
164
1,007
596
0
1,570
71
59
----------67----------
67
197
529
397
159
1,200
535
0
1,715
66
54
----------59----------
59
179
579
396
164
1,339
525
0
1,839
74
58
----------57----------
57
189
633
468
192
1,535
476
1
1,964
76
81
----------83----------
83
240
628
542
217
1,943
321
1
2,186
77
120
----------99----------
99
296
723
557
283
2,309
259
0
2,524
91
123
----------113----------
113
327
783
546
420
2,521
241
0
2,802
109
144
----------127----------
127
380
885
605
490
3,023
159
0
3,255
115
34
149
119
268
417
1,080
773
656
4,000
146
1
4,316
161
32
155
139
294
487
1,285
821
896
4,647
100
1
5,139
157
25
167
156
323
505
1,233
746
851
4,344
77
1
4,832
128
31
129
153
282
441
1,077
571
771
3,747
61
1
4,102
131
51
123
173
296
478
1,084
529
748
3,621
40
0
3,940
121
58
107
183
290
469
971
517
815
3,139
39
0
3,573
90
70
89
171
260
420
841
435
681
2,626
24
0
2,956
91
53
77
154
231
375
751
336
561
2,167
24
0
2,429
63
48
62
150
212
323
700
294
498
2,025
19
0
2,249
63
40
60
130
190
293
623
276
408
1,891
21
0
2,061
54
30
46
129
175
259
603
263
438
1,798
15
0
2,006
51
24
48
122
170
245
553
245
395
1,589
12
0
1,809
47
20
41
79
120
187
513
225
380
1,460
13
0
1,660
46
19
36
92
128
193
499
213
418
1,402
21
0
1,613
45
21
39
123
162
228
453
179
414
1,305
10
0
1,500
45
19
43
122
165
229
435
159
408
1,234
7
0
1,425
46
22
39
117
156
224
421
151
456
----------1,209----------
1,428
44
28
42
123
165
237
412
146
497
----------1,208----------
1,449
47
35
45
129
174
256
395
140
499
----------1,145----------
1,384
46
37
45
132
177
260
381
143
520
----------1,116----------
1,370
47
33
42
144
186
266
371
139
582
----------1,140----------
1,452
38
37
43
152
195
270
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
359
123
592
----------1,127----------
1,488
43
36
34
118
152
231
435
131
627
----------1,361----------
1,736
51
45
41
115
156
252
474
143
603
----------1,423----------
1,813
48
37
31
97
128
213
521
150
826
----------1,472----------
2,100
47
42
28
81
109
198
609
242
1,104
----------1,713----------
2,598
55
43
38
83
121
219
621
260
1,170
----------1,906----------
2,871
52
41
39
73
112
205
577
241
1,211
----------1,958----------
2,971
51
43
39
65
104
198
555
226
1,316
----------1,837----------
2,938
55
41
34
85
119
215
701
438
2,354
92
48
66
124
137
278
----------n/a----------
449
2,036
