National Oilwell Varco released its 63rd Annual Rig Sensus. NOV’s research director Carlos Huerta said that international land and global offshore rig demand continues to drift lower, as markets seek to rebalance. The North American land rig market is slowly improving, after finding a cyclical bottom in late May. Offshore rig markets continue to be challenged by low E&P activity as a large number of new-builds are expected to be delivered over the next three years.
Census highlights:
– The U.S. fleet had an overall decline of 188 rigs, causing the total available count to drop about 5% to 2,242 rigs. This net decrease is the result of 240 rig deletions and 52 rig additions.
– Utilization of the U.S. fleet (combined land and offshore) declined for the second consecutive year and now stands at 23%.
– The number of active global offshore mobile units dropped by 29% to 460 units, vs. 647 in the previous census period.
– Overall, international land rig utilization declined eleven percentage points for 2016 and now stands at 70%.
– There were 30 new offshore rigs delivered in the last year, well below the historical average of 40 units observed between 2009 and 2015. The main reason for the reduction in new unit deliveries is that many offshore drillers are choosing to delay their delivery date to reduce their capital requirements and avoid having new assets idle in their fleet
– For the first time in years, the number of scrapped rigs and new cold-stackings combined, was able to offset the 30 new-builds that the market absorbed in the last 12 months.  (Image: NOV)