423 rigs active in OPEC countries now, only 46% of U.S. activity
OPEC may have cut production but drilling activity has not followed along, according to an analysis of the Baker Hughes International Rig Count.
Baker Hughes reports a total of 423 rigs active in OPEC countries in October, just under half the number of U.S. rigs active in the month. The OPEC count rose by one in October, as increased activity in Saudi Arabia outweighed dropping rig counts in most countries.
OPEC drilling activity fell during the oil price crash, but was not nearly as affected as U.S. operations.
The number of rigs operational in the U.S. peaked at 1,931 in late 2014 and bottomed out at 404 in May 2016, for a decrease of nearly 80%. In OPEC countries, by contrast, drilling activity peaked at 500 rigs in early 2014 and fell to 400 in mid-2016, meaning OPEC activity dropped by only 20%.
Source: EnerCom Analytics
The group announced production cuts in late 2016, which would seem to suggest drilling activity would decrease. This has not been the case, however, as OPEC drilling activity actually rose from 402 in December 2016 to 438 in July 2017. This may not be as immediately significant as a rise in U.S. rig activity, for most projects take longer than unconventional drilling, but suggests OPEC production will grow in the near future.
Indonesia, Venezuela, Saudi Arabia top historic drillers
As might be expected, Saudi Arabia makes up the largest share of OPEC drilling activity, with 121 rigs active. This has not always been the case, however. Baker Hughes data stretches back to 1982, so a large amount of historical data is available.
For most of the 1980s and early 1990s here’s how OPEC drilling looked:
- Indonesia dominated OPEC drilling activity, and was only occasionally surpassed by Algeria.
- After 1993, Venezuela came to the forefront.
- Venezuela was the most active OPEC driller from 1993 to 2002, and remained near the top until 2014.
In terms of rig count, the rise of Saudi Arabia is surprisingly recent. The kingdom has been among at or near first place since late 2006, but only became dominant in mid-2014.
Source: EnerCom Analytics
Baker Hughes data does have a few gaps, however. Data on Iranian rig activity ceased in 2006, and showed far less variation than other countries before that. In addition, Iraqi drilling activity was not counted between August 1991 and June 2012.
Source: EnerCom Analytics
