World Land Drilling Rig Market Forecast 2015-2019

 Published On: Sep, 2015 |  Published By: Westwood Global Energy Group
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More Modest Outlook for Global Land Rig Market in 2015-2019 Due to Current Low Oil Price Environment

Given the current economic conditions, there is a more modest outlook for the land drilling rig market through to 2019. The recent decline in oil price is expected to result in a 19% drop in onshore wells drilled in 2015, with several operators having announced planned reductions in expenditure. This expected fall in drilling activity is likely to have a significant impact on rig demand, with the global operational and active rig populations forecast to decline by 11% and 12% respectively in 2015.

Based on a scenario in which the oil price returns to pre-crisis levels of $70-80 per barrel in 2016, the number of operational rigs is expected to rise by 19% over 2015-2019 as drilling activity recovers. Asia-Pacific is expected to see the largest regional increase in capable fleet size, with 230 units forecast to be added in 2015-2019.

Increased well depths and drilling complexity have resulted in rising demand for high horsepower (HP) rigs, with the global number of active rigs rated over 1,250 HP having risen by 33% in 2010-2014. This trend is set to continue over the forecast period at a CAGR of 5%. More complex well drilling requirements are also expected to drive an increase in expenditure on components such as top drives over the 2015-2019 period. An increase in the number of rigs being converted to AC power, as well as the use of technologies such as pad drilling, is expected as operators seek to maximise the efficiency of drilling operations.

The possibility of a further decline in oil price remains a potential downside risk to the forecast. Although the risk to conventional onshore drilling is lower, high Capex unconventional projects, including the use of Enhanced Oil Recovery (EOR) techniques could become uneconomic if the current economic conditions continue. In this event, demand for high HP rigs is likely to be impacted.

The report has been developed and expanded, following client feedback and extensive industry analysis, to include:

Drivers, trends & themes – a discussion of the fundamentals that drive the exploration process, including those which impact the land drilling market.
Manufacturing – detailed overview of the key elements of a land rig, the supply chain and sales process. Global analysis of the key rig equipment manufacturers operating in each regional rig component market. Rig equipment trends for top drive systems & rotary steerable systems, automation & AC power and pad drilling & walking rigs. Land rig construction forecast.
Regional drilling market – comprehensive summary at the regional level including: onshore wells drilled, rig fleet growth, active drilling rigs required and key trends in each region. Since producing the previous edition of the report, Douglas-Westwood has gained improved visibility of core markets such as China, resulting in a 4% increase in the number of identified rigs.
Regional competitive landscape of identified rigs – matrix of drilling contractors operating in each region, indicating the overall size, composition and countries of operation of each contractor’s fleet.
Market forecasts – comprehensive examination, analysis and ten-year view of the market, with historic data covering the period 2010-2014 and forecast data for 2015-2019, including: onshore wells drilled, rig fleet growth, active drilling rigs required and global trends.

Why purchase the World Land Drilling Rig Market Forecast?

The report includes the very latest market outlook based on DW Drilling & Production data and reflects the current low oil price environment.

DW’s market forecasting is trusted by sector players worldwide, with clients including the world’s top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms.

The report is essential reading for land rig contractors, rig manufacturers, oilfield service companies, oil & gas operators and financial institutions wanting to better understand where and when to make investment decisions.

Our proven approach includes:

Unique and proprietary data – DW maintains a unique global in-house database of rig fleets: the Douglas-Westwood Land Rig Database, which is updated year-round from published sources and insight gained from industry consultation – this involves discussions with a wide-range of companies including equipment manufacturers, engineering consultancies and private equity firms.
Methodology – the rig demand model is based on drilling and production forecasts and the rigs identified in DW’s Land Rig Database, with assumptions fine-tuned using knowledge which DW has gained through extensive consultations with industry.
Country-by-country analysis – comprehensive examination of 35 key countries, including: oil & gas production, onshore wells drilled, active drilling rigs required, forecast rig utilisation, investment and key trends in each country, fleet capacity and features, plus the competitive landscape.
Concise report layout – consistent with DW’s commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of industry background and supporting materials condensed to enable quick review with ‘speed-read’ summaries of key points throughout.

Table of Contents

1 Summary & Conclusions 9
Summary 10
Conclusions 11

2 Drivers & Indicators 12
Market Drivers 13
Energy Demand 14
Exploration & Production 15
Oil & Gas Prices 16
Oil & Gas Price Sensitivities 17
Drilling, Complexity & Unconventional E&D 18
North American Land Fleet Evolution 19
Political Considerations: MENA 20
Political Considerations: Local Content & Corruption 21

3 Manufacturing 22
Overview: Key Elements of a Land Rig 23
Supply Chain & Sales Process 24
Key Components: Manufacturers 25
Rig Equipment: OEM Manufacturer Ranking 26
Global Top Drive Markets 27
Rig Equipment Trends: Top Drive Systems & Rotary Steerable Systems 28
Rig Equipment Trends: Automation & AC Power 29
Rig Equipment Trends: Pad Drilling & Walking Rigs 30
Land Rig Additions Forecast 31

4 Methodology 32
Rig Data, Analysis & Assumptions 33
Drilling & Production Forecast: Methodology 34
Differing Rig Counts 35
Country Analysis: Definitions 36
Country Analysis: Key Metrics 38

5 Global Analysis 39
Global Outlook 40
Regional Rig Fleets 41
Global Rig Fleet: Identified Drilling Rigs 42

6 Asia Analysis 43
Asia: Rig Supply and Demand 44
Asia: Identified Rigs (Competitive Landscape) 45
Australia 46
China 47
India 48
Indonesia 49
Pakistan 50
Thailand 51

7 Eastern Europe & FSU Analysis 52
Eastern Europe & FSU: Rig Supply and Demand 53
Eastern Europe & FSU: Identified Rigs (Competitive Landscape) 54
Azerbaijan 55
Kazakhstan 56
Poland 57
Romania 58
Russia 59

8 Latin America Analysis 60
Latin America: Rig Supply and Demand 61
Latin America: Identified Rigs (Competitive Landscape) 62
Argentina 63
Brazil 64
Colombia 65
Ecuador 66
Mexico 67
Peru 68
Venezuela 69

9 MENA Analysis 70
MENA: Rig Supply and Demand 71
MENA: Identified Rigs (Competitive Landscape) 72
Algeria 73
Egypt 74
Iran 75
Iraq 76
Kuwait 77
Libya 78
Oman 79
Saudi Arabia 80
Syria 81
Turkey 82
United Arab Emirates (UAE) 83
Yemen 84

10 North America Analysis 85
North America: Rig Supply and Demand 86
North America: Identified Rigs (Competitive Landscape) 87
Canada 88
USA 89

11 Sub-Saharan Africa Analysis 90
Sub-Saharan Africa: Rig Supply and Demand 91
Sub-Saharan Africa: Identified Rigs (Competitive Landscape) 92
Gabon 93
Nigeria 94
Sudan and South Sudan 95

12 Western Europe Analysis 96
Western Europe: Rig Supply and Demand 97
Western Europe: Identified Rigs (Competitive Landscape) 98

13 Appendix 99
Data and Text Conventions 100

List of Figures

Figure 1: Global – Rig Fleet and Drilling Utilisation 10
Figure 2: Active Drilling Rig Count by Region 2010-2019 10
Figure 3: Primary Energy Consumption by Region 14
Figure 4: Onshore Production Shortfall 2000-2013 14
Figure 5: IHS CERA Upstream Cost Index 2000-2014 (Q3) 15
Figure 6: Annual Brent Spot Oil Price Forecast 16
Figure 7: Annual Natural Gas Price 16
Figure 8: Relative Sensitivities of Various Markets to Changes in Oil & Gas Prices 17
Figure 9: A well being drilled horizontally, engaging in fracking  18
Figure 10: USA Available vs. Active Land Rigs, 1988-2014 19
Figure 11: Drilling Markets Affected by the Arab Spring 20
Figure 12: Local Content and Corruption in MENA Countries 21
Figure 13: Key Elements of a Land Rig 23
Figure 14: Land Drilling Supply Chain 24
Figure 15: Rig Equipment Manufacturer Ranking 26
Figure 16: Pad Drilling 30
Figure 17: Typical Drilling Pad 30
Figure 18: Land Rig Construction Forecast by Region, 2008-2017 31
Figure 19: Comparison of Historic Rig Counts, Saudi Arabia 35
Figure 20: Usable Fleet vs. Operating vs. Drilling, Saudi Arabia 35
Figure 21: UAE – Rig Fleet and Implied Utilisation 36
Figure 22: UAE – Estimated Split of Market Share by Contractor & Type 37
Figure 23: Global – Rig Fleet and Drilling Utilisation 40
Figure 24: Global – Wells Drilled vs. Rigs Operational 40
Figure 25: Number and Specification of Identified Drilling Rigs in Each Country 42
Figure 26: Asia – Rig Fleet and Drilling Utilisation 44
Figure 27: Asia – Wells Drilled vs. Rigs Operational 44
Figure 28: Australasia – Rig Fleet and Drilling Utilisation 46
Figure 29: Australia – Estimated Split of Market Share by Contractor & Type 46
Figure 30: China – Rig Fleet and Drilling Utilisation 47
Figure 31: China – Estimated Split of Market Share by Contractor & Type 47
Figure 32: India – Rig Fleet and Drilling Utilisation 48
Figure 33: India – Estimated Split of Market Share by Contractor & Type 48
Figure 34: India – Rig Fleet and Drilling Utilisation 49
Figure 35: India – Estimated Split of Market Share by Contractor & Type 49
Figure 36: Pakistan – Rig Fleet and Drilling Utilisation 50
Figure 37: Pakistan – Estimated Split of Market Share by Contractor & Type 50
Figure 38: Pakistan – Rig Fleet and Drilling Utilisation 51
Figure 39: Pakistan – Estimated Split of Market Share by Contractor & Type 51
Figure 41: Eastern Europe & FSU – Rig Fleet and Drilling Utilisation 53
Figure 40: Eastern Europe & FSU – Wells Drilled vs. Rigs Operational 53
Figure 42: Azerbaijan – Rig Fleet and Drilling Utilisation 55
Figure 43: Azerbaijan – Estimated Split of Market Share by Contractor & Type 55
Figure 44: Kazakhstan – Rig Fleet and Drilling Utilisation 56
Figure 45: Kazakhstan – Estimated Split of Market Share by Contractor & Type 56
Figure 46: Poland – Rig Fleet and Drilling Utilisation 57
Figure 47: Poland – Estimated Split of Market Share by Contractor & Type 57
Figure 48: Romania – Rig Fleet and Drilling Utilisation 58
Figure 49: Romania – Estimated Split of Market Share by Contractor & Type 58
Figure 50: Russia – Rig Fleet and Drilling Utilisation 59
Figure 51: Russia – Estimated Split of Market Share by Contractor & Type 59
Figure 53: Latin America – Rig Fleet and Drilling Utilisation 61
Figure 52: Latin America – Wells Drilled vs. Rigs Operational 61
Figure 54: Argentina – Rig Fleet and Drilling Utilisation 63
Figure 55: Argentina – Estimated Split of Market Share by Contractor & Type 63
Figure 56: Brazil – Rig Fleet and Drilling Utilisation 64
Figure 57: Brazil – Estimated Split of Market Share by Contractor & Type 64
Figure 58: Colombia – Rig Fleet and Drilling Utilisation 65
Figure 59: Colombia – Estimated Split of Market Share by Contractor & Type 65
Figure 60: Ecuador – Rig Fleet and Drilling Utilisation 66
Figure 61: Ecuador – Estimated Split of Market Share by Contractor & Type 66
Figure 62: Mexico – Rig Fleet and Drilling Utilisation 67
Figure 63: Mexico – Estimated Split of Market Share by Contractor & Type 67
Figure 64: Peru – Rig Fleet and Drilling Utilisation 68
Figure 65: Peru – Estimated Split of Market Share by Contractor & Type 68
Figure 66: Venezuela – Rig Fleet and Drilling Utilisation 69
Figure 67: Venezuela – Estimated Split of Market Share by Contractor & Type 69
Figure 69: MENA – Rig Fleet and Drilling Utilisation 71
Figure 68: MENA – Wells Drilled vs. Rigs Operational 71
Figure 70: Algeria – Rig Fleet and Drilling Utilisation 73
Figure 71: Algeria – Estimated Split of Market Share by Contractor & Type 73
Figure 72: Egypt – Rig Fleet and Drilling Utilisation 74
Figure 73: Egypt – Estimated Split of Market Share by Contractor & Type 74
Figure 74: Iran – Rig Fleet and Drilling Utilisation 75
Figure 75: Iran – Estimated Split of Market Share by Contractor & Type 75
Figure 76: Iraq – Rig Fleet and Drilling Utilisation 76
Figure 77: Iraq – Estimated Split of Market Share by Contractor & Type 76
Figure 78: Kuwait – Rig Fleet and Drilling Utilisation 77
Figure 79: Kuwait – Estimated Split of Market Share by Contractor & Type 77
Figure 80: Libya – Rig Fleet and Drilling Utilisation 78
Figure 81: Libya – Estimated Split of Market Share by Contractor & Type 78
Figure 82: Oman – Rig Fleet and Drilling Utilisation 79
Figure 83: Oman – Estimated Split of Market Share by Contractor & Type 79
Figure 84: Saudi Arabia – Rig Fleet and Drilling Utilisation 80
Figure 85: Saudi Arabia – Estimated Split of Market Share by Contractor & Type 80
Figure 86: Syria – Rig Fleet and Drilling Utilisation 81
Figure 87: Syria – Estimated Split of Market Share by Contractor & Type 81
Figure 88: Turkey – Rig Fleet and Drilling Utilisation 82
Figure 89: Turkey – Estimated Split of Market Share by Contractor & Type 82
Figure 90: Australasia – Rig Fleet and Drilling Utilisation 83
Figure 91: Australia – Estimated Split of Market Share by Contractor & Type 83
Figure 92: Yemen – Rig Fleet and Drilling Utilisation 84
Figure 93: Yemen – Estimated Split of Market Share by Contractor & Type 84
Figure 95: North America – Rig Fleet and Drilling Utilisation 86
Figure 94: North America – Wells Drilled vs. Rigs Operational 86
Figure 96: Canada – Rig Fleet and Drilling Utilisation 88
Figure 97: Canada – Estimated Split of Market Share by Contractor & Type 88
Figure 98: USA – Rig Fleet and Drilling Utilisation 89
Figure 99: USA – Estimated Split of Market Share by Contractor & Type 89
Figure 101: Sub-Saharan Africa – Rig Fleet and Drilling Utilisation 91
Figure 100: Sub-Saharan Africa – Wells Drilled vs. Rigs Operational 91
Figure 102: Gabon – Rig Fleet and Drilling Utilisation 93
Figure 103: Gabon – Estimated Split of Market Share by Contractor & Type 93
Figure 104: Nigeria – Rig Fleet and Drilling Utilisation 94
Figure 105: Nigeria – Estimated Split of Market Share by Contractor & Type 94
Figure 106: Sudan and South Sudan – Rig Fleet and Drilling Utilisation 95
Figure 107: Sudan and S. Sudan – Estimated Split of Market Share by Contractor & Type 95
Figure 109: Western Europe – Rig Fleet and Drilling Utilisation 97
Figure 108: Western Europe – Wells Drilled vs. Rigs Operational 97

List of Tables

Table 1: Global Identified Rig Fleet and Implied Utilisation 40
Table 2: Regional Rig Fleets 41
Table 3: Asia Identified Rigs 45
Table 4: Australia – Fleet HP 46
Table 5: China – Fleet HP 47
Table 6: India – Fleet HP 48
Table 7: India – Fleet HP 49
Table 8: Pakistan – Fleet HP 50
Table 9: Pakistan – Fleet HP 51
Table 10: Eastern Europe & FSU Identified Rigs 54
Table 11: Azerbaijan – Fleet HP 55
Table 12: Kazakhstan – Fleet HP 56
Table 13: Poland – Fleet HP 57
Table 14: Romania – Fleet HP 58
Table 15: Russia – Fleet HP 59
Table 16: Latin America Identified Rigs 62
Table 17: Argentina – Fleet HP 63
Table 18: Brazil – Fleet HP 64
Table 19: Colombia – Fleet HP 65
Table 20: Ecuador – Fleet HP 66
Table 21: Mexico – Fleet HP 67
Table 22: Peru – Fleet HP 68
Table 23: Venezuela – Fleet HP 69
Table 24: MENA Identified Rigs 72
Table 25: Algeria – Fleet HP 73
Table 26: Egypt – Fleet HP 74
Table 27: Iran – Fleet HP 75
Table 28: Iraq – Fleet HP 76
Table 29: Kuwait – Fleet HP 77
Table 30: Libya – Fleet HP 78
Table 31: Oman – Fleet HP 79
Table 32: Saudi Arabia – Fleet HP 80
Table 33: Syria – Fleet HP 81
Table 34: Turkey – Fleet HP 82
Table 35: Australia – Fleet HP 83
Table 36: Yemen – Fleet HP 84
Table 37: North America Identified Rigs 87
Table 38: Canada – Fleet HP 88
Table 39: USA – Fleet HP 89
Table 40: Sub-Saharan Africa Identified Rigs 92
Table 41: Gabon – Fleet HP 93
Table 42: Nigeria – Fleet HP 94
Table 43: Sudan and South Sudan – Fleet HP 95
Table 44: Western Europe Identified Rigs 98

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