Only 174 rigs drilling in Latin America

International drilling activity fell last month, according to the latest edition of Baker Hughes International Rig Count.

A net 11 rigs shut down in the past month, the largest drop in eight months, leaving 967 rigs active internationally. This is the lowest level since January, but still exceeds that of mid 2016 through 2017.

The drop in international activity was primarily driven by Latin America, where 15 rigs shut down. Unsurprisingly, most of the regional decrease was seen in Venezuela. Eight rigs shut down in the country in May, matching the decline seen in April. With only 28 active rigs in the country, Venezuelan activity is at its lowest point in 29 years.

Other declines in Latin America came in Argentina, Bolivia and Mexico, where two rigs shut down, and Brazil, where one came offline. No Latin American country saw increases in activity this month. These declines mean there are 174 Latin American rigs currently active, the lowest regional rig count in Baker’s records, which stretch back to 1982. While the immediate decline has been caused by diminishing Venezuelan activity, the downturn caused significant declines in Argentina, Brazil, Colombia, Ecuador and Mexico as well, contributing to the all-time low.

Latin American Drilling at Lowest Point in 36 Years

Source: EnerCom Analytics

European activity at nine-year low

Declining activity was also observed in Europe, with eight rigs shutting down. Unlike in Latin America, the drop in European rig count was not concentrated in one country, but instead was spread throughout the region. The largest decline was seen in Norway, where three rigs shut down, but two also came offline in Russia’s Sakahlin project, and one shut down in Iceland, Italy and the Netherlands.

With only 80 rigs operating in the region, Europe is also at a multi-year low for drilling activity. The last time European drilling was at this level was nine years ago, in mid-2009.

Latin American Drilling at Lowest Point in 36 Years

Source: EnerCom Analytics

Significant increases in rig count were seen in the Asia-Pacific region, where a net nine rigs began drilling. Australia showed the largest increase in May, with five rigs coming online. Activity also increased in Vietnam and India, which added two rigs each, and Brunei, Myanmar, Papua New Guinea and Thailand, where one rig came online. These additions were offset by declining activity in offshore China and Malaysia, with two and one rig shutting down, respectively. There are now 218 rigs active in the Asia-Pacific region, the most since January.

Activity also slightly increased in the Middle East, where three rigs came online to bring the regional total to 401. The increase in activity was concentrated in Saudi Arabia, where five new rigs began drilling. Slight increases were also seen in Israel, Oman and Pakistan, which each added one rig. Egyptian activity declined significantly, with five rigs shutting down.

While individual countries in Africa often showed shifts in rig count, the region as a whole held steady at 94 active rigs. Angola, Kenya, Nigeria, Ethiopia and Niger each added rigs this month, while rigs came offline in Algeria and Congo.

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