• One year after setting record lows for utilization, the land rig markets in North America have seen a remarkable recovery. In the US, onshore rig demand surged by 105% to 976 active units, compared with 476 in the previous year. In Canada, there were 155 active land rigs during the census period, an increase of 65% over last year’s 94 units. Nevertheless, fleet utilization in both countries remain below normal at 46% (US) and 24% (Canada). Many lower-spec rigs are expected to exit the available fleet next year, as operators continue to give preference to higher-specification pad-capable rigs for development of onshore unconventional resources.
     
    Internationally, there were 763 active rigs during the census period, 8.5% higher than the level seen in the 2016 edition. Overall, utilization improved marginally, up by 1% to 71% this year. Africa and Latin America are the regions with the lowest utilizations, at 55% and 42%, respectively. If low demand persists in these regions, some of the excess supply – rigs idle for more than three years – will no longer be considered as available in next year’s census. 
     
    For offshore rig markets, the cyclical bottom is still ahead. Global demand dropped by 7% from 2016 levels to an average of 429 units, and marketed utilization at the time of the census was 60%, well below normal levels in the 70% to 80% range. The inflection point for offshore rigs is expected to happen in the next few quarters as demand improves and rig retirements accelerate in an effort from rig owners to rebalance the market.
     
    The available and active rig counts used for the census are calculated every year during a 45-day window in the late spring/early summer. A rig is considered active if it was deployed at any point during the census window; rigs are considered available if they have been active within the past three years (for land rigs) or five years (for offshore rigs). Offshore rigs that are confirmed to be cold-stacked are subtracted from the available fleet but are added back once the rig is marketed again.
     
    To continue reading the census highlights, open the NOV 64th Annual Rig Census link below, published in the November / December 2017 issue of Drilling Contractor Magazine.

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    Published Date: 2017-11-15
    Source: National Oilwell Varco