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Global oil rig utilisation rates at a high

The utilisation rate for land oil rigs has been constantly rising. Analysts believe that the utilisation rate for offshore rigs has also started to improve

The operational utilisation rate of oil rigs worldwide has been constantly rising. Though this rise is mainly driven by an increase in the utilisation of land rigs, 284 offshore rigs were operational in November—the second highest monthly rate in 2009—as per data with Baker Hughes, a consulting services group which services the worldwide oil and natural gas industry. The entity says that the number of rigs operating internationally has been on a constant rise over the past six months.

“The utilisation (rate) for offshore rigs has started to improve. For example, Aban Offshore had eight rigs idle a few months back, but in August 2009 it received contracts for five rigs. Only three rigs remain idle presently,” said Kejal Mehta, analyst, Prabhudas Lilladher Pvt Ltd.

As per data from Baker Hughes, international rig counts have gone up to 1,025 in November 2009 from a low of 986 in April 2009. The rig count for 2009 was highest at 1,044 in January 2009. This total international rig count is mainly driven by utilisation of land rigs. In June 2009, 698 land rigs were operational, while 741 land rigs were operational in November 2009. In November 2009, 284 offshore rigs were operational. In February 2009, 286 offshore oil rigs were operational. The international rig count is inclusive of the total number of rigs in Europe, the Middle East, Africa, Latin America and the Asia-Pacific region.

Baker Hughes data on worldwide figures for rig counts indicates that total rig counts have increased to 2,409 in November 2009 from 1,987 in June 2009. The positive trend is visible in the number of operational rigs over the past six months. In July 2009, 2,080 oil rigs were operational, the figure went up to 2,105 rigs in August 2009, and touched 2,203 rigs for the month of September and October 2009. This data includes figures for both land and offshore rigs.

The offshore rig utilisation rate was on a decline from July 2008 (312 offshore rigs operational), which dropped to an all-time low of 261 operational rigs in August 2009. “The utilisation rate had dropped significantly for offshore rigs in the jack-up segment, which has been picking up recently. The utilisation rate for these rigs is expected to improve,” added another analyst who did not wished to be named.

Though the demand for oil rigs is expected to go up, analysts do not envisage a rise in the day rates for offshore drilling. “We expect the demand for offshore rigs to pick up, but a hike in day rates is not expected. A lot of new rigs will be coming up, so capacity utilisation will not touch 90%-95%. This (high rate of) capacity utilisation is required for a hike in day rates,” added the analyst.

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