Oil price volatility extremely affects the demand for onshore drilling rigs, as fewer wells are drilled during the industry recession. Historically, apart from Russia and the CIS, The United States and Canada has held the largest share of demand, followed by the Middle East and Latin America. In the Middle East, Oman, Saudi Arabia and Kuwait are the most significant locations for land rigs.
The demand patterns between the regions globally are a little various, where the majority of the development in The United States and Canada is for hi-spec rigs (1,500/ 2,000/ 3,000 hp) utilized in horizontal drilling. Historically the Middle East and Russia have utilized lower specs rigs, with more demand for 2,000 hp rigs (and above) beginning to develop from 2014 onwards.
Regionally, around 75 % of the units are drilling rigs, with the rest being work-over units. The rig fleet in the GCC area has been growing significantly over the last numerous years, reaching close to 370, with major purchases in UAE, KSA, and Oman. Most current global active land rig count (Source: Baker Hughes, different estimates for Russia and CIS) Onshore rigs have different power supply mechanisms, i.
SCR or Air Conditioning. SCR is old technology, whereas AC-powered (with variable speed) rigs permits changing the load and torque as needed. Reference supplies drilling performance and control however takes in less fuel and minimizes wear and tear. The bulk of brand-new onshore rigs internationally are equipped with the AC power system.
In the USA, around 70% of the land rigs are AC powered. It is expected that A/C powered and rigs will dominate the increase in rig supply capacity all over the world. The Middle East market for onshore drilling rigs includes national/domestic rig specialists, in addition to global gamers, with the domestic business dominating and managing more than 70% of the rig fleet (consisting of work-over rigs).
Around 40% of the rig count in the region is high specification 2,000 hp to 3,000 hp rigs, with circa 25% of the units being 1,500 hp to 2,000 hp rigs and c. 15% 1,000 hp to 1,500 hp rigs. This info is as of Q4 2020 and based upon different companies reports and discussions and our quotes.
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