From the Midland Reporter Telegram
A new report says the international rig count could rebound and break 1,100 by 2020, according to Raymond James. Analysts from Raymond James said increased spending by international oil and gas companies and a rebound in Latin American drilling will drive the increases and lead to the international drilling rig count stabilizing around 1,150 after 2020.
The recovery comes after international drilling rig counts plummeted from 1,382 in July 2014 — when oil prices stood above $100 a barrel — to 925 in Nov. 2016. The count stood at 1,008 in Aug., the first time since Feb. 2016, when oil prices fell below $30 a barrel, there were more than 1,000 active international oil and gas drilling rigs, according to data from oil and gas service company Baker Hughes.
The international rig counts do not include oil and gas drilling rigs in the U.S. and Canada.
The analysis by Raymond James said Latin America took the biggest hit during the oil downturn, falling from 410 active drilling rigs in Aug. 2014 to 178 in June 2016. Since then Latin America has oscillated between 176 and 199, with the latest count for Aug. at 192.
Much of the rigs lost in Latin America were from Mexico’s state-owned oil and gas company Petróleos Mexicanos or Pemex when it was forced to cut rigs to service high levels of debt. A similar situation led to cuts by Brazil’s state-run Petrobras, while Colombia and Venezuela also lost dozens of rigs.
The sharp decline in Latin America could lead to the largest upside, according to Raymond James, with much of that driven by interest from private international oil and gas companies. Irving-based Exxon Mobil recently won nearly 72,000 acres of offshore leases from Brazil, increasing its acreage in the country to 2.3 million net acres.
The biggest unknown is how much money international oil and gas companies will focus on the U.S. as its production continues to grow. The analysis noted that while Royal Dutch Shell has mostly exited the U.S. the United Kingdom’s BP recently bought BHP Billiton’s shale assets for $10.5 billion.
