Drilling rigs growth depends more and more on LNG

A report on the global land drilling industry says that the onshore drilling rig market is set to grow by about 13 per cent between now and 2016. It is estimated that there are 9,700 onshore drilling rigs in operation today; that number will grow to more than 11,000 by 2016. Growth is driven by increasing demand, which includes “high specification” rigs, according to a release announcing the World Land Drilling Rig Market Forecast 2012-2016. The lead author of the report, Calum Shaw, says that pressure on the supply chain will be “significant,” and the number of rigs required will increase in China, Colombia, Russia, Saudi Arabia and the United States.

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Drilling activity, measured by the number of rigs in operation per week, has been down in North America for the first half of the year. It is expected to pick up again as LNG becomes more important in Western Canada. A number of LNG plants are proposed for development in the next few years.

The total number of drilling rigs operating in Canada and the United States was down in the first half of 2013 compared to the same period of 2012. Canada’s total rigs in operation per week was 347 from January to June 2013, compared to 385 one year ago. According to the Oil & Gas Journal, operators will drill a total of 11,270 wells in Western Canada this year, down from 11,828 wells in 2012. The drop in oil rigs is expected to be offset by an increase in gas rigs as the liquefied natural gas industry heats up.

Precision Drilling of Calgary, one of the biggest oil and gas drilling companies in North America, announced disappointing earning numbers this week, but market analysts are giving the company favourable forecasts based on potential LNG activity in Western Canada. The company announced last week that it would spend $654 million to build five new Super Series rigs, taking its total North American “fleet” to 196 rigs.

Another drilling company, Trinidad Drilling Ltd. announced today that it will build one of the country’s “largest and most technically advanced” land rigs to drill natural gas in the Liard Basin. The area is currently being developed to supply gas for future LNG plants being proposed for the British Columbia coast.

The 3,000 horsepower AC rig will have a depth capacity of 8,000 metres. It will be built in Alberta.

A second drilling company, AKITA Drilling Ltd., announced a multi-year contract with a multinational oil and gas producer to construct a new ultra-deep capacity pad rig and provide drilling services in Western Canada.  Construction of the rig is to begin immediately.

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