Weekly Offshore Rig Review: Improving Productivity
Worldwide offshore rig utilization inched up slightly this week to 83.6% with 556 of 665 offshore rigs currently under contract.
Worldwide rig utilization and the worldwide rig count have been setting highs not reached since the 1980’s and we wanted to look how rig productivity has been affecting drilling activity over the years. Two measures were used to get a sense of the gains. The first is wells per rig, and the second is footage per rig, the dynamics of which are shown in Figure 1 below.
Figure 1. US Rig Productivity|
The blue line shows the number of wells drilled per rig each year from 1949 to 2005 in the US, land and offshore. These include oil, gas and dry holes. In 1949 the average was 18.5 wells/rig and in 2005 it was 29.6 wells/rig. Productivity, measured as wells/rig, peaked in 1986 at 42.1 wells/rig. Over 56 years the average rig in the US is drilling 160% more wells per year. This works out to 0.84% annual improvements from 1949 (0.44% from 1981).
However, the productivity shows much stronger gains when rig performance is measured by footage drilled (see the green line in Figure 1). In 1949 the averaged footage drilled per rig was 67,238 ft and by 2005 it had risen to 169,127 ft. This translates into a 252% increase in the footage being drilled per rig. This works out to a 1.66% gain annually over 56 years (0.86% from 1981).
Evaluation of rig productivity like this signifies clearly the engineering advancement generations of engineers, drillers, operators and contractors have achieved . In simpler terms, it appears that an average rig today can do what two rigs could do in 1949. Putting this in perspective, to do the drilling of the 1,745 US rigs drilling in December 2006 with rigs from 1949 there would be 2,793 rigs based on the rigs / well and 4,389 rigs based on footage / rig. Stated in terms of 1981 rigs 2,228 rigs would be required based on rigs / well or 2,820 rigs based on footage / rig. So productivity gains have made a difference, but still nowhere near the peak of 4,505 US rigs drilling in December of 1981.
Get the Details
For more information on how rig productivity is affecting rig demand along with detailed predictions of utilization over the next 10 years for each type of rig, contact us today about the RigOutlook Worldwide Long Term Rig Demand report. This report provides an overview of expected rig utilization for jackups, semisubmersibles, drillships, and land rigs. This predictive model has proven to be highly accurate over the last year, with its predictions falling within less than 0.5% margin of error for predictions created last March. So, if you want to know when rig utilization will peak and fall, you can trust RigOutlook for an accurate prediction. Contact Tony Beebe via email at email@example.com or call our offices at +1-281-345-4040 for details on the RigOutlook reports and how you can subscribe.