63rd Annual RIG CENSUS
A Special Section of
Published in November 2016
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
Global rig utilization at record low levels,
U.S. land activity will rebound in 2017
Available
5
4
2,242
3
Active
2
1
0
1955 1960 1965
519
1970
1975
1980 1985 1990 1995 2000 2005 2010 2015
Note: 2002 data are estimates.
Fig. 2. U.S. available rigs vs. utilization 1955-2016.
6
5
100
Utilization rate
23%
80
4
60
3
Available rigs
2
2,242
Utilization rate, %
This year’s NOV Annual Rig Census gave us an opportunity
to analyze the composition of the global drilling fleet just as
the North American land rig markets began to rebound. Land
rig utilization during this census period was historically low, at
22% and 15% for the U.S. and Canada, respectively. Around
the world, overall land rig demand continues to drift lower,
perhaps showing signs of an inflection point in 2017, as oil
prices stabilize.
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. In response, rig owners have
accelerated both the retirement of aged and obsolete assets, as
well as the cold-stacking of rigs with lower opportunities of getting work in this competitive environment. 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.
The precipitous drop in drilling activity, resulting from two
consecutive years of contraction in global E&P spending, has
caused thousands of rigs to be sidelined since the end of 2014.
While our census methodology keeps all rigs that were active in
the past three years as “available supply,” it is possible that a large
portion of these displaced units will not return to service, facing
competition from newer, more capable rigs.
The available and active rig counts used for the census are
calculated every year, during a 45-day period in early summer.
This year, that period coincided with the lowest reported land
rig counts in North America for any year on our records. A
widely available industry report, published on May 27, noted
that the total land rig count for the U.S. fell to 374 units, or 80%
lower than it was during fourth-quarter 2014. Canadian land
drilling demand also found an apparent cyclical bottom at just
34 active units on the day our census period began.
The number of available offshore rigs in the world decreased
as a result of rig owners working to retire and mothball idle
capacity to offset the 30 new units delivered to the market.
Available offshore mobile units totaled 782 rigs, with 473 of
those rigs performing work during our 45-day window (60%
utilization). This represented a decrease of 144 active rigs
year-on-year.
6
Number of rigs, thousands
ŝŝCARLOS HUERTA, National Oilwell Varco
Fig. 1. U.S. available vs. active rigs, 1955-2016.
Number of rigs, thousands
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.
40
20
1
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Note: 2002 data are estimates.
CENSUS HIGHLIGHTS
Key statistics from the 2016 census include the following:
• 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, Fig. 1.
• Utilization of the U.S. fleet (combined land and offshore)
declined for the second consecutive year and now stands
at 23%, Fig. 2.
•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%.
U.S. RIG ATTRITION
We define an available rig as one that is currently active or
ready to drill without significant capital expenditure. To be
considered available, a land unit must not have been stacked for
longer than three years; five years for offshore units. If it can be
determined that a rig is cold-stacked, then it is removed from
World Oil® / NOVEMBER 2016 3
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
Table 1. Changes in the available U.S. fleet.
Previous year’s fleet
2016 2015 2014 2013 2012 2011 20102009200820072006
2,371
3,254
3,055
3,006
3,081
3,153
3,169
3,076
2,817
2,298
2,026
Reductions to fleet
Removed from service
Moved out of the country
–234
–3
Destroyed
Subtotal, deletions
–3 –1–5–3 –1–3–2–5 0–4–6
–240
–1,120
–188
–207
–410
–334
–259
–218
–88
–95
–119
Additions to fleet
Newly manufactured
Reactivated or assembled from parts
Moved into the country
Subtotal, additions
–1,086
–33
41
8
3
52
Net change
182
41
14
237
–177
–6
–182
–22
187
194
6
387
147
100
9
256
–212
–45
158
98
6
262
131
96
16
243
–164
–49
237
44
30
311
–59
–29
202
132
13
347
–77
–14
349
260
5
614
–99
–14
238
148
5
391
2,242
2,371
3,254
3,055
3,006
3,081
3,153
3,169
3,076
2,817
2,298
519
1,210
2,269
2,055
2,248
2,059
2,024
1,264
2,541
2,402
2,200
Total Active Rigs
Utilization
23% 51%70%67%75%67%64%40%83%85%96%
stroyed.” Three rigs were classified in this category during this
year. This compares with one rig for 2015, and five that were
counted as destroyed in the 2014 census.
Fig. 3. U.S. change in available rigs, 1955-2016.
Change in available rigs
223
100
12
335
–315
–16
–188
–883199 49–75–72 –16 93259519272
Total available rigs
1200
1000
800
600
400
200
U.S. RIG ADDITIONS
0
-200
-400
-600
-800
-1000
–386
–23
-188
1955 1960 1965 1970
1975 1980 1985 1990 1995 2000 2005 2010 2015
Note: 2002 data point is an estimate.
the available fleet. Extensively damaged rigs are also taken out
of the available count. Rigs that have moved to other countries
are not counted as available in the U.S., however, they may show
up in the international tally. All rigs removed from the fleet in
each of these cases are totaled as “Deletions to the U.S. Fleet.”
There were a total of 240 rig deletions this year, compared with
last year’s 1,120 unit decline, and a 10-year average of around
300 deletions per year, Table 1.
The largest number of deleted rigs continues to be in the
“Removed from Service” category. This number dropped from
1,086 units in 2014 to 234 units this year, which is closer to the
historical average. In the land segment, most of these removals
came from rigs being cannibalized to support the operation of
other rigs. There were also important cold stacking and scrapping efforts on the offshore side, accounting for roughly half of
the 234 removals from service.
We did not see as many rigs moving in and out of the U.S. as
we did in 2015, when 33 rigs were exported and 14 imported.
In 2016, imports and exports of rigs offset each other at three
units. Low oil prices have caused the prospect of moving rigs to
other countries to be less attractive, as drilling activity in many
other parts of the world also remains low.
Rig accidents occasionally occur, and equipment may sustain irreparable damage. Irreparable rigs are classified as “De4 NOVEMBER 2016 / WorldOil.com
As the new rig building programs wind down, rig owners
continue to put their new supply into the market, especially if a
new rig is committed for long-term contract work. In other cases, rig owners have chosen to delay delivery of their new rigs until market conditions improve. This is especially true offshore,
causing abnormally low new rig additions compared to historical trends. Census figures show that a total of 52 rigs were added
to the fleet over the last year, compared with 237 units in 2015,
and 387 units in 2014. These additions were not enough to offset the 240 deletions from the fleet, resulting in a net decrease
in the size of the rig fleet for the first time since 2012, Table 1.
The low utilization of the existing U.S. fleet caused the number of new-builds delivered to U.S. drillers to drop more than
70% compared with the 182 new units delivered in 2015. The
number of U.S. rigs that were “Reactivated or Assembled from
Parts” continued to drop in 2016. This year’s count came in at
only eight units, while 41 units were brought back into service
in 2015.
Three rigs that “Moved into the Country” are counted as additions, though this was offset by three units that “Moved Out
of the Country.” Therefore, 2016 had zero net imports and exports. This is down from the 14 rigs that moved into the U.S.
and 33 that moved out of the country during 2015.
With a total of 52 rig additions and 240 rig deletions, the
net change in the fleet over the past year was a 188-unit decline, or 5.4%. This is far less than last year’s historic rig count
drop of 883 rigs, caused by the significant shift from natural
gas to oil drilling in late 2011, but still represents the second
consecutive year of fleet size contraction. This compares to a
fleet increase of 199 units in 2014, Fig. 3. The U.S. fleet now has
2,242 available rigs.
CANADIAN FLEET
The Canadian available fleet continued to drop in 2016. The
number of rigs removed from service increased as many stacked
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
Table 2. Changes to the Canadian rig fleet.
Previous year’s fleet
2016 2015 2014 2013 2012 2011 20102009200820072006
650
796
777
747
774
795
852
875
871
799
741
Reductions to fleet
Removed from service
Moved out of the country
–46
0
–181
–8
–38
–11
–52
–21
–67
–33
–63
–11
–94
–17
–17
–42
–24
–19
–6
–10
–7
–8
Destroyed
Subtotal, deletions
00000000–100
–46
–189
–49
–73
–100
–74
–111
–59
–44
–16
–15
Additions to fleet
Newly manufactured
Reactivated or assembled from parts
Moved into the country
Subtotal, additions
Net change
Total available rigs
Total Active Rigs
Utilization
324246435 8 1529478663
0
12
32
33
34
35
35
2
1
2
10
0
7
12
6
4
10
4
5
0
0
0
34368
10373535436488873
–43
–146
19
30
–27
–21
–57
–23
4
72
58
612
650
796
777
747
774
795
852
875
871
799
91
266
352
289
329
369
334
191
406
371
669
15% 41%44% 37%44%48%42% 22%46%43%84%
Table 3. Changes to the global offshore mobile fleet.
Previous year’s fleet
Reductions to fleet
Removed from service
Destroyed
Subtotal deletions
2016 2015 2014 2013 2012 2011 201020092008200720062005200420032002 2001
891 890 850 824 794 745 705 675 650 654 641 673 678 677 670 n/a
–179
–50
–22–17–18–7–2–11–7
–26–10
–42–15–2–2
n/a
–20–3–1–20–4–300–6–3–1–30
n/a
–181–50–25–18–20 –7 –6–14 –7–26–16–45–16 –5 –2n/a
Additions to fleet
Newly manufactured
30
48
63
42
44
47
40
43
281194958
n/a
Reactivated or assembled from parts 0
3
2
2
6
9
6
1
4
11
20
9
2
1
1 n/a
Subtotal additions
30 51654450564644 32 2229 13 11 6 9n/a
Net Change
–151 140 2630494030 25 –4 13–32 –5 1 7n/a
Total Available Rigs
740 891 890 850 824 794 745 705 675 650 654 641 673 678 677 670
Total Active Rigs
460 647 725 697 626 559 572
571 592 574 557 545 486 479 460 488
Utilization
62%73% 81%82%76%70%77% 81%88%88%85%85%72% 71%68%73%
rigs were taken out of commission. “Newly Manufactured”
units all but came to a halt, and the data did not indicate many
reactivations, given the poor prospects for additional work.
Losses outpaced gains, and the available fleet size fell as a result.
Rigs “Removed from Service” continue to be the primary
cause of Canadian fleet attrition. This includes land rigs idle for
more than three years and offshore rigs idle for more than five
years, as well as those that might require a considerable capital
outlay. There were 46 rigs classified in this category, which were
dropped from the census available count. This compares with
181 rigs that were removed from service in 2015.
We could not find clear information regarding the movement of rigs in and out of Canada and there were no Canadian
units reported as “Destroyed” over the past year. The sum of all
deletions for Canada totaled 46 units in 2016.
The number of “Newly Manufactured” rigs entering the
Canadian fleet this year was three units, compared with 24
rigs in both 2015 and 2014. Reactivations were also not common during the analysis period, as rig activity was at the cyclical low, averaging 48 rigs for the entire second quarter of 2016.
There were three rig additions and 46 deletions this year, which
caused the Canadian available count to drop to a new 10-year
low of 612 units, Table 2.
GLOBAL OFFSHORE MOBILE FLEET
The combination of ongoing deliveries of new units from
backlog into an already oversupplied environment has put tre-
mendous pressure on fleet utilization, which we estimate to be
62% during this census. This is the lowest level observed in the
past 16 years. Efforts are being made to adjust rig supply to this
new level of demand. Rig owners are postponing delivery of
new units, cold-stacking and retiring aged and obsolete assets
to reduce their costs.
In this census period, a total of 30 rigs entered the fleet, down
from 48 units in the previous year and 63 in 2014. There were 50
rigs retired from the fleet this year and an additional 120 rigs put
into long-term stacking. Some of these cold-stacked assets will
be reactivated when conditions improve, but there will be some
that remain sidelined and eventually demolished. In aggregate,
the available global offshore drilling fleet saw a net reduction
of 151 rigs to yield a total of 740 available rigs, and of these,
460 units were active during the 45 day census period, Table 3.
If an offshore rig has not been active in the past five years and
does not have a signed contract, it is removed from the available
count until those conditions are met. This prevents rigs that
cannot be reactivated quickly from being counted.
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.
The worldwide offshore mobile fleet is widely distributed
with the Middle East, Northwest Europe and South America
World Oil® / NOVEMBER 2016 5
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
CENSUS GROUND RULES
• The geographical breakdown is shown in Table 4.
• Contractor-owned rigs are those belonging to companies whose primary business is offering drilling contracting services.
• To be considered active, a rig must be drilling at least one day during the 45-day qualification period during the early summer of each year.
• Only workable rotary rigs are included; cable tool rigs are excluded.
• To be considered available, a rig must be able to go to work without requiring a significant capital expenditure.
• Rotary land rigs stacked for an extended period of time, typically three years or longer, are not counted as available. Offshore
rigs must not be stacked for longer than five years.
• A rig must be capable of, and normally employed for, drilling deeper than 3,000 ft. Therefore, some shallow drilling rigs are
excluded, but this is necessary to ensure that well-servicing rigs are not counted.
• Electric rigs include all those that transmit power from prime movers to electrically driven equipment.
• Inland barges include barge-mounted rigs that may be moved from one location to another via canal, bayou or river, and
drill in sheltered inland waters. Offshore rigs include stationary platform units (both self-contained and tender-supported),
bottom-supported mobile units, and floating rigs (both drillships and semisubmersibles).
Fig. 4. 2016 global offshore mobile fleet by region.
Fig. 5. Makeup of the global offshore mobile fleet.
Tenders
Submersibles* Drill barges
30 rigs
1 rigs
Semisubmersibles
16 rigs
19 active
0 active
132
rigs
12 active
63% util.
0% util.
79 active
75% util.
60% util.
*Arctic rigs are included with submersibles.
This does not include platform and inland barge rigs.
Middle East 25.01%
NW Europe 14.21%
South America 9.94%
Indian Ocean 8.92%
Far East 8.37%
SE Asia 8.00%
U.S. GOM 6.93%
West Africa 5.87%
Mexico 5.68%
Med/Black Sea 2.62%
Caspian 1.53%
Australia/New Zealand 1.17%
Central America 1.09%
Canada East 0.44%
Baltic 0.22%
Canada Other 0.00%
US Alaska 0.00%
accounting for 50% of all active rigs during the census period.
Active rigs by region, and fleet composition by specific rig type
are shown in Fig. 4 and Fig. 5, respectively.
U.S. DRILLING ACTIVITY
Drilling activity in the U.S. continued to decline since the
last edition of the census. The number of active rigs tumbled
to 519 during the 45-day period, less than half of the number
of rigs observed in the early summer of 2015. The methodology used to count active rigs for the NOV rig census is different from other published rig counts. The NOV methodology
counts a rig as active if it has drilled at any time during a defined
6 NOVEMBER 2016 / WorldOil.com
Jackups
458 rigs
295 active
64% util.
Drillships
103 rigs
55 active
53% util.
Total fleet = 740
Active rigs = 460
Utilization = 62%
45-day period in late spring. For 2016, the window of activity
was May 6 thru June 19. This is in contrast with the procedure
used by other published rig counts, which look at weekly activity. Using a longer observation period ensures we do not miss
rigs that are active and in transit from one location to another.
This year, overall U.S. rig utilization fell to an unprecedented
23%, compared with 51% in 2015 and 70% in 2014. According
to our records, this is the lowest utilization level in the last 61
years since our census was first published in 1955, with 1986
being the second lowest utilization at 26%. However, the speed
at which the rig counts collapsed did not allow adequate time
to identify those rigs that are less marketable and that will eventually exit the fleet. This could mean that the number of available rigs is lower than the number calculated by applying our
census methodology.
There were 1,723 available rigs in the U.S. that were idle during this year’s census period. Most of these units are waiting for
contracts. These inactive rigs were classified according to the
length of time they have been idle. Rigs stacked less than one
year totaled 766 units; one to two years, 885 units; and two to
three years, 75 units.
Full-year utilization is the ratio of active to available rigs that
drilled at any time during the past year. This is another statistic
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
Table 4. U.S. regional census results.
Ownership
Year AvailableActive Utilization Driller Operator
Power source
Rig type
BottomTotal
Mechanical SCR/Electric Land Barge Floating Platform SupportedOffshore
Alaska 2016 20 5 25% 15 1
2015 25 15 60% 22 3
Northern
2016
262
34
13%
236
31
Rockies
2015
244
108
44%
218
26
Southern
2016
172
34
20%
168
4
Rockies
2015
189
113
60%
165
24
Northeast
2016
215
43
20%
204
11
States
2015
237
125
53%
192
45
Permian
2016
625
166
27%
584
41
Basin
2015
552
295
53%
507
45
Gulf Coast 2016
321
61
19%
303
18
2015370 175 47% 332 38
ArkLaTex
2016
105
28
27%
99
6
2015
146
87
60%
130
16
California2016 58
8
14%
55
3
201580 26 33% 69 11
Southeast2016 22
7
32%
22
0
States
2015
213
97
46%
200
13
Mid-
2016
300
71
24%
240
60
Continent
2015
315
169
54%
246
69
Total
20162100 457
22% 1926 175
20152371 1210
51% 2081 290
5
15
200 1
0
1
2
3
22
230 1
0
1
2
36
226
262
0
0000
36
208
244
0
0000
9082172
0
0000
10683189
0
0000
96119215
0
0000
111126
237
0
0000
265
359
625
0
0000
225
327
552
0
0000
71
250
321
1
1
2
2
6
95
275
357 1
3
2
7
13
2382
105
0
0000
72 74
146
0
0000
32
26
58 0
0
4
0
4
48
32
750 1
4
0
5
9
13
22 21 40
31
15
107
49
164
55 34
57
31
36
158
122178
300
0
0000
129186315
0
0000
749
1350
2100 22 42
37
18
119
874
1497
2193 35 62
37
44
178
used to measure overall fleet dynamics. Adding the 519 active
rigs to the 766 rigs stacked less than one year provides the total
number of rigs that drilled between the end of the 2015 census
and the end of the 2016 census.
Census results for the U.S. are also calculated by region. All
U.S. regions had decreases in both available and active rigs in
2016. The year-to-year breakdown for 2014 and 2015 is shown
in Table 4. The regions hit the hardest this year were the Northern Rockies, where utilization fell to 13% and the Gulf Coast,
where activity decreased 65% after a loss of 114 active rigs. California also saw a low utilization level of 14%, dropping 22 rigs
compared to last year.
The regional figures above are a combination of land and offshore statistics. When studying U.S. land rigs, the 2016 utilization rate declined to 23%, compared to 52% deployed in 2015.
The U.S. marine mobile fleet also had a considerable utilization
drop in 2016 to just 54% versus 69% last year. Demand for exploration and development offshore rigs by type varied greatly,
with jackup rigs having the lowest utilization at 39%, and semisubmersible rigs having the highest utilization of 60%.
By analyzing the U.S. land fleet, we can compare rigs by their
drilling depth capacity. The land rigs with the highest utilization rate were the largest rigs, having depth capacity greater
than 20,000 ft, at 30% utilization, while the lowest were those in
the 10,000 ft to 12,999 ft-range at 13%. This makes sense, since
horizontal drilling has dominated activity in the country, and
wells with long horizontal departures require bigger rigs that
can generate higher-torque and sufficient hoisting capacity to
drill these wells efficiently, Table 5.
CANADIAN DRILLING ACTIVITY
Year-to-year drilling activity in Canada fluctuates with commodity prices and the timing of the spring breakup, when rig
moving is restricted in environmentally sensitive areas. During the 2016 census, Canadian rig activity fell 65%. After having surged to 352 active rigs in 2014, the active count was 91
units during the 45-day census window between May 6 to June
Fig. 6. Canadian available vs. active rigs, 2002-2016.
1,000
900
800
700
600
500
400
300
200
100
0
Available
Number of rigs
Region
Active
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
19. Since the majority of these rigs became inactive within the
last two years and, therefore, are still considered available under
census methodology, we find that active utilization in Canada
dropped to an extremely low 15%, Fig. 6.
Segmenting the Canadian fleet by depth capacity, 34% of
available rigs are rated between 10,000 ft and 13,000 ft, followed
by 25% of units between 13,000 ft and 16,000 ft. Utilization by
depth capacity indicates that those rigs with ratings 20,000 ft
and over have the greatest utilization levels. This is consistent
with the proliferation of unconventional oil and gas activity that
requires longer horizontal sections, increasing overall measured
depth of the well.
INTERNATIONAL LAND RIG UTILIZATION
International utilization is estimated on a regional basis.
This year, NOV developed a new methodology to derive more
accurate “marketed” utilization in each region. We increased the
granularity and frequency of observations, and compared that
with information from our representatives in each region. Using the new approach, we estimate 2016 international land rig
availability at 3,172 units, of which 2,205 were active during the
census period. This results in a global land rig utilization level of
70%, down from our estimated 80% in last year’s census.
World Oil® / NOVEMBER 2016 7
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
Table 5. U.S. rig utilization by depth capacity.
Depth rating, ft
Over 16,000 to 13,000 to 10,000 to 6,000 to 3,000 to
By region Status
20,000 19,999
15,999
12,999
9,999
5,999 Total
AlaskaAvailable 9 1
5
4
1
020
Active
30 0 2 0 05
Idle
61 5 2 1 0
15
Utilization, % 33%
0%
0%
50%
–
–
25%
NorthernAvailable
118
92
33
16
2
1 262
RockiesActive
21
11
2
0
0
0 34
Idle
9781 31 16 2 1
228
Utilization, % 18%
12%
6%
0%
0%
0%
13%
SouthernAvailable
10
40
44
31
39
8 172
RockiesActive
6
7
6
2
10
3 34
Idle
433 38 29 29 5
138
Utilization, % 60%
18%
14%
6%
26%
38%
20%
NortheastAvailable
58
44
37
29
39
8 215
StatesActive
17 11
5
3
5
243
Idle
4133 32 26 34 6
172
Utilization, % 29%
25%
14%
10%
13%
25%
20%
PermianAvailable 203 113
124
133
43
9 625
BasinActive
8533
18 19 8 3
166
Idle
11880 106 114 35 6
459
Utilization, % 42%
29%
15%
14%
19%
33%
27%
Gulf Coast Available
180
48
41
26
14
12
321
Active 3011 5 7 6 2
61
Idle
15037 36 19 8 10
260
Utilization, % 17%
23%
12%
27%
43%
17%
19%
ArkLaTexAvailable
31
34
18
15
7
0 105
Active 165 4 3 0 0
28
Idle
1529
14 12 7 077
Utilization, % 52%
15%
22%
20%
–
–
27%
CaliforniaAvailable
12
10
2
16
12
6
58
Active 01 1 1 3 2
8
Idle
129
1 15 9 4
50
Utilization, % 0%
10%
50%
6%
25%
33%
14%
SoutheastAvailable
9
5
6
2
0
0
22
StatesActive
2 0
3
2
0
0 7
Idle
75 3 0 0 0
15
Utilization, % 22%
0%
50%
100%
–
–
32%
Mid- Available 9562 72 52 18 1
300
ContinentActive
40
17
10
3
1
0
71
Idle
5545 62 49 17 1
229
Utilization, % 42%
27%
14%
6%
6%
0%
24%
By rig type
InlandAvailable 12 4
622
BargeActive
4 1
1
0
0 0 6
Idle
83 5 0 0 0
16
Utilization, % 33%
25%
17%
–
–
–
27%
FloatingAvailable
41
0
0
1
0
0 42
Active 250 0 0 0 0
25
Idle
160 0 1 0 0
17
Utilization, % 61%
–
–
0%
–
–
60%
Land Available 725449 382 324 175 45
2,100
Active 22096 54 42 33 12
457
Idle
505353 328 282 142 33
1,643
Utilization, % 30%
21%
14%
13%
19%
27%
22%
OffshoreAvailable
14
7
4
6
36
0 67
PlatformActive
4
1
1
2
11
0 19
Idle
106 3 4 25 0
48
Utilization, % 29%
14%
25%
33%
31%
–
28%
BottomAvailable
13
4
1
0
0
0 18
SupportedActive
5
2
0
0
0
0
7
Idle
82
1 0 0 0
11
Utilization, % 38%
50%
0%
39%
Total Available 805464 393 331 211 45
2,249
Active
258100
56 44 44 12514
Idle
547364 337 287 167 33
1,735
Utilization, % 32%
22%
14%
13%
21%
27%
23%
Table 6. International land rig utilization.
20062007200820092010 2011 2012 2013 2014 2015 2016
Europe/FSU/Russia
96%97%90%78%86%80%94%75% 96%96%72%
Africa
99%86%85%70%77% 83%96%83%87%75% 53%
Middle East
88%94%94%82%90%97%100%94%100%99%75%
Asia/China
97%95%96%93%96%96%96%96%86%67%77%
Latin America
92% 90%90%81% 74% 93% 88% 80%84%67% 41%
Overall
95%94%92%84%88%90%95%85%91% 81% 70%
8 NOVEMBER 2016 / WorldOil.com
The Latin American region had the
lowest land rig utilization, with an estimated 41%. In Mexico, lower oil prices
forced producers to cut-back on operations in the southern region and focus
their investment on the continental shelf
and exploration activities. In Colombia,
the high cost of production caused the rig
count to drop by more than 80%, resulting in excessive idle capacity in the country, where usual activity was in the 40-50
rig range. Argentina also saw its active rig
count drop, however, this market is more
stable than the rest of the region, posting one of the highest utilization rates in
the mid 70%.
In Europe, low activity prevailed, but a
relatively low number of rigs in the region
kept utilization high at 72%. We estimate
Russia provides virtually all of the rig
count in the region, and our census puts
the country’s land rig utilization close
to 80%.
In Africa, land rig utilization was estimated at 53%, having 69 active units and
129 rigs available for the purposes of this
census. Algeria, which is fully utilized,
and Kenya at 85%, are the strongest in
the area in terms of activity. Our estimates
for Nigeria point to a 30% utilization of
their land fleet.
In Asia, India and China are the top
two strongest markets, with Indonesia
coming in third. We estimate the AsiaPacific/China regional utilization at 77%,
with a combined 740 active rigs during
the census period.
Within the Middle East, the UAE
and Qatar are essentially fully employed,
with Saudi Arabia running 106 of its
113 available rigs, resulting in a 94% utilization rate. Kuwait utilized 83% of its
53 available rigs in country. However,
the region did not show an increase in
rig activity as a result of recovering oil
prices, Table 6.
GLOBAL OFFSHORE MOBILE
ACTIVITY
The activity level for the global offshore mobile fleet continued to decline,
with 460 rigs active in 2016, which is a
decrease of 187 units, or 29%, compared
with 2015. After peaking at 725 active
rigs during the 2014 census, the number
of active rigs has declined 37%, while the
available fleet has only shrunk 17% over
the same period, leaving many rigs idle in
an environment that offers few opportunities for incremental work. As a result,
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
Fig. 7. Global offshore mobile available vs. active rigs, 2001-2016.
800
Active
Number of rig owners
700
Available
Number of rigs
1,000
900
800
700
600
500
400
300
200
100
0
Fig. 8. U.S. rig owners, 1987-2016.
600
500
400
300
218
200
100
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
utilization of the fleet dropped from 73% in 2015 to a record
low in the last 15 years of 62% for 2016, Fig. 7.
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Note: 2002 data point is an estimate.
Fig. 9. Some of the longest laterals in the U.S. are drilled in
North Dakota, where this large rig is working on behalf of Hess
Corporation in the Bakken Shale. Image: Hess Corporation.
U.S. INDUSTRY TRENDS
The number of rig owners holding available rigs is also
counted. In recent years, the number of owners had somewhat
leveled off, with the number of new drilling companies added
balancing closely with the number of companies ceasing operations. For 2016, the net number of rig owners declined. Company closures, mergers and acquisitions, and the number of rigs
failing to qualify as active in our analysis, all contributed to a net
reduction of 32 companies this year. The total number of rig
owners is now 218 in 2016 compared with 250 last year. In the
2016 census, the number of land drilling rigs owned by operators fell to 175, or 8% of the available fleet, Fig 8. This is down
115 units from previous year, where operators owned 13% of all
available rigs in the country.
In the U.S., there is some indication that the lengthening of
lateral sections could lead to the need for larger, more powerful rigs to drill these sections, Fig. 9. While some areas are at
the lateral length limit due to land restrictions, other areas will
continue to seek longer horizontal sections, which could lead to
a new class of land rigs coming to market to satisfy this demand.
U.S. FORECAST FOR 2017
While it would be ambitious to predict the exact effect on
the drilling rig fleet for the future, it now looks as if the cyclical demand bottom is behind us. As oil prices stabilize and the
historically high levels of oil inventories continue to be worked
off, we should see an increasing need for new wells and more
rigs being contracted. Some of the most widely distributed forecasts point to a sharp bounce in U.S. drilling, particularly on the
land side. However, we should keep in mind that incremental
activity will come in an environment of intense competition
among drillers, due to the large number of idle rigs that will be
battling for work.
The proliferation of unconventional activity over the last decade showed that rigs that are best suited for horizontal drilling
in multi-well pads will hold the preference of oil and gas companies. While supply is abundant at current levels, the utilization
level of these assets will continue to rise, requiring upgrading or
new-building activity to satisfy demand.
ACKNOWLEDGEMENT
NOV partnered with several companies to collect the industry statistics used in this article. IHS
Drilling Data and RigData are the primary sources used for the U.S. land rig fleet and global offshore
mobile fleet. Information for some areas, particularly the international fleet, was collected and analyzed by NOV personnel. The following individuals are recognized for their specific contributions to
this year’s rig census: Jacoby Garcia (RigData); Diane Henderson ( JWN Energy); Jesus Varela, Steve
Thompson, Robin Macmillan, and Michael Gaines (NOV).
CARLOS HUERTA is director of technical marketing
and research at NOV Rig Systems. He began his career
as a field engineer for ReedHycalog in 2002. Since
then, he has held positions in the drilling optimization,
product line management, business development and
sales organizations before moving to the corporate
technical marketing team at NOV. Mr. Huerta holds a
BS degree in chemical engineering from Tecnológico de Monterrey,
Mexico, and is a candidate in Rice University’s Executive MBA program.
World Oil® / NOVEMBER 2016 9
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
U.S. Rig Census historical data, 1955–2016.
Depth rating, ft
Unit
%
Util.
Driller Operator
Year Available change change Active rate Idle
owned owned
1955
3,206
–
–
2,654
83%
552
2,806
400
1956
3,277
71
2%
2,836
87%
441
2,911
366
1957
3,076
–201
–6%
2,519
82%
557
2,796
280
1958
2,971
–105
–3%
1,909
64% 1,062
2,735
236
1959
3,057
86
3%
2,476
81%
581
2,848
209
1960
3,077
20
1%
2,150
70%
927
2,874
203
1961
2,774
–303
–10%
2,064
74%
710
2,606
168
1962
2,555
–219
–8%
1,835
72%
720
2,406
149
1963
2,781
226
9%
2,002
72%
779
2,672
109
1964
2,752
–29
–1%
2,048
74%
704
2,644
108
1965
2,614
–138
–5%
1,934
74%
680
2,531
83
1966
2,524
–90
–3%
1,714
68%
810
2,472
52
1967
2,408
–116
–5%
1,573
65%
835
2,359
49
1968
2,111
–297
–12%
1,508
71%
603
2,067
44
1969
2,060
–51
–2%
1,649
80%
411
2,033
27
1970
1,898
–162
–8%
1,331
70%
567
1,869
29
1971
1,859
–39
–2%
1,308
70%
551
1,832
27
1972
1,768
–91
–5%
1,381
78%
387
1,741
27
1973
1,767
–1
0%
1,473
83%
294
1,739
28
1974
1,894
127
7%
1,769
93%
125
1,881
13
1975
2,028
134
7%
1,877
93%
151
2,014
14
1976
2,204
176
9%
1,979
90%
225
2,180
24
1977
2,482
278
13%
2,399
97%
83
2,451
31
1978
2,851
369
15%
2,785
98%
66
2,818
33
1979
3,182
331
12%
2,874
90%
308
3,144
38
1980
3,672
490
15%
3,542
96%
130
3,626
46
1981
4,803
1131
31%
4,703
98%
100
4,762
41
1982
5,644
841
18%
3,225
57% 2,419
5,606
38
1983
5,273
–371
–7%
2,539
48% 2,734
5,241
32
1984
4,580
–693
–13%
3,090
67% 1,490
4,553
27
1985
4,409
–171
–4%
2,625
60% 1,784
4,386
23
1986
3,993
–416
–9%
1,052
26% 2,941
3,961
32
1987
3,331
–662
–17%
1,388
42% 1,943
3,299
32
1988
2,752
–579
–17%
1,532
56% 1,220
2,716
36
1989
2,542
–210
–8%
1,444
57% 1,098
2,508
34
1990
2,320
–222
–9%
1,677
72%
643
2,294
26
1991
2,251
–69
–3%
1,485
66%
766
2,209
42
1992
1,996
–255
–11%
1,192
60%
804
1,956
40
1993
1,853
–143
–7%
1,279
69%
574
1,806
47
1994
1,841
–12
–1%
1,221
66%
620
1,789
52
1995
1,729
–112
–6%
1,232
71%
497
1,680
49
1996
1,649
–80
–5%
1,263
77%
386
1,597
52
1997
1,665
16
1%
1,447
87%
218
1,606
59
1998
1,705
40
2%
1,305
77%
400
1,640
65
1999
1,644
–61
–4%
860
52%
784
1,599
45
2000
1,636
–8
0%
1,215
74%
421
1,557
79
2001
1,722
86
5%
1,593
93%
129
1,643
79
2002n/an/an/an/a
n/a
n/an/a
n/a
2003
1,719
–3
0%
1,334
78%
385
1,648
71
2004
1,988
269
16%
1,674
84%
314
1,896
92
2005
2,026
38
2%
1,920
95%
106
1,962
64
2006
2,298
272
13%
2,200
96%
98
2,191
107
2007
2,817
519
23%
2,402
85%
415
2,511
306
2008
3,076
259
9%
2,541
83%
535
2,698
378
2009
3,169
93
3%
1,264
40% 1,905
2,729
440
2010
3,153
–16
–1%
2,024
64%
1129
2,702
451
2011
3,081
–72
–2%
2,059
67% 1,022
2,626
455
2012
3,006
–72
–2%
2,248
75%
758
2,567
439
Over
16,000 to 13,000 to 10,000 to
20,000 19,999
15,999
12,999
–––––– 104 ––––––
445
613
–––––– 110 ––––––
453
562
–––––– 111 ––––––
425
553
–––––– 141 ––––––
405
487
–––––– 184 ––––––
424
520
–––––– 210 ––––––
378
477
–––––– 193 ––––––
356
399
–––––– 218 ––––––
307
471
–––––– 272 ––––––
298
479
–––––– 305 ––––––
251
463
–––––– 322 ––––––
242
449
–––––– 350 ––––––
206
461
–––––– 375 ––––––
199
435
–––––– 372 ––––––
185
381
–––––– 366 ––––––
188
352
–––––– 343 ––––––
219
322
–––––– 361 ––––––
198
329
–––––– 397 ––––––
171
301
–––––– 413 ––––––
164
318
–––––– 425 ––––––
214
339
–––––– 448 ––––––
225
380
–––––– 498 ––––––
239
366
–––––– 577 ––––––
274
461
–––––– 693 ––––––
313
565
–––––– 872 ––––––
350
631
–––––– 1,059 ––––––
419
704
–––––– 1,405 ––––––
595
950
–––––– 1,717 ––––––
717
1104
–––––– 1,639 ––––––
662
993
–––––– 1,408 ––––––
591
933
–––––– 1,332 ––––––
570
894
–––––– 1,220 ––––––
496
789
–––––– 991 ––––––
427
637
–––––– 771 ––––––
365
529
–––––– 704 ––––––
329
515
399
221
313
488
380
210
304
491
315
175
267
441
303
152
240
420
326
147
245
411
317
148
239
393
311
139
221
384
339
137
230
387
376
142
238
391
375
134
232
368
392
134
231
355
424
161
254
373
n/an/a n/a n/a
390
205
274
368
424
230
295
473
375
251
311
472
394
287
384
562
453
347
508
658
471
378
605
741
478
449
670
754
517
472
662
721
498
523
646
667
514
589
606
616
2013
3,055
49
2%
2,055
67%
1,000
2,625
430
706
561
551
2014
3,254
199
7%
2,269
70%
985
2,782
472
782
645
567
599
2015 2,371
–883
–27%
1,210
51%
1,161
2,081
290
803
429
386
320
2016
2,100
–271
–11%
455
22%
1,645
1,925
175
805
464
393
331
AVG.
2,677
–14
2%
1,912
73%
765
2,558
129
533
291
363
527
Note: The data for 1953, 1954 and 2002 are not available.
10 NOVEMBER 2016 / WorldOil.com
600
NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS
Power source
Rig type
6,000 to 3,000 to Mechanical
Inland
Offshore
Bottom
Offshore
Subtotal
9,999
5,999 SCR/Elec. Diesel
Gas SteamLand barge Floating platform supported stationary offshore
1,237
807
30
n.a.
n.a.
285 2,996
162
10–––––– 38 ––––––
38
210
1,256
896
34
n.a.
n.a.
247 3,025
175
14
–––––– 63 ––––––
63
252
1,075
912
52
n.a.
n.a.
195 2,793
184
32–––––– 67 ––––––
67
283
1,067
871
49
n.a.
n.a.
158 2,715
185
37
–––––– 34 ––––––
34
256
996
933
54
n.a.
n.a.
113
2,811
190
34–––––– 22 ––––––
22
246
1,033
979
73
1,039
1,864
101 2,837
178
39
–––––– 23 ––––––
23
240
937
889
66
1,092
1,549
67 2,535
173
28–––––– 38 ––––––
38
239
823
736
63
913
1,525
54 2,300
178
41
–––––– 36 ––––––
36
255
964
768
106
1,027
1,600
48 2,514
179
50–––––– 38 ––––––
38
267
1,029
704
113
1,040
1,577
22 2,479
162
50
–––––– 61 ––––––
61
273
936
665
138
1,051
1,404
21 2,343
144
67–––––– 60 ––––––
60
271
863
644
164
964
1,376
20 2,259
128
58
–––––– 79 ––––––
79
265
776
623
206
955
1,239
8
2,114
121
72–––––– 101 ––––––
101
294
680
493
189
882
1,037
3 1,825
114
77
–––––– 95 ––––––
95
286
626
528
177
952
928
3 1,827
98
50–––––– 85 ––––––
85
233
580
434
154
895
847
2 1,662
106
55
–––––– 75 ––––––
75
236
535
436
170
937
750
2 1,592
124
62–––––– 81 ––––––
81
267
490
409
176
955
637
0
1,551
77
60
–––––– 80 ––––––
80
217
517
355
164
1,007
596
0 1,570
71
59–––––– 67 ––––––
67
197
529
397
159
1,200
535
0
1,715
66
54
–––––– 59 ––––––
59
179
579
396
164
1,339
525
0 1,839
74
58–––––– 57 ––––––
57
189
633
468
192
1,535
476
1 1,964
76
81
–––––– 83 ––––––
83
240
628
542
217
1,943
321
1 2,186
77
120–––––– 99 ––––––
99
296
723
557
283
2,309
259
0 2,524
91
123
–––––– 113 ––––––
113
327
783
546
420
2,521
241
0 2,802
109
144–––––– 127 ––––––
127
380
885
605
490
3,023
159
0 3,255
115
34
149
119
268
417
1,080
773
656
4,000
146
1 4,316
161
32
155
139
294
487
1,285
821
896
4,647
100
1 5,139
157
25
167
156
323
505
1,233
746
851
4,344
77
1 4,832
128
31
129
153
282
441
1,077
571
771
3,747
61
1 4,102
131
51
123
173
296
478
1,084
529
748
3,621
40
0 3,940
121
58
107
183
290
469
971
517
815
3,139
39
0 3,573
90
70
89
171
260
420
841
435
681
2,626
24
0 2,956
91
53
77
154
231
375
751
336
561
2,167
24
0 2,429
63
48
62
150
212
323
700
294
498
2,025
19
0 2,249
63
40
60
130
190
293
623
276
408
1,891
21
0 2,061
54
30
46
129
175
259
603
263
438
1,798
15
0 2,006
51
24
48
122
170
245
553
245
395
1,589
12
0 1,809
47
20
41
79
120
187
513
225
380
1,460
13
0 1,660
46
19
36
92
128
193
499
213
418
1,402
21
0
1,613
45
21
39
123
162
228
453
179
414
1,305
10
0 1,500
45
19
43
122
165
229
435
159
408
1,234
7
0 1,425
46
22
39
117
156
224
421
151
456
–––––– 1,209 ––––––
1,428
44
28
42
123
165
237
412
146
497
–––––– 1,208 ––––––
1,449
47
35
45
129
174
256
395
140
499
–––––– 1,145 ––––––
1,384
46
37
45
132
177
260
381
143
520
–––––– 1,116 ––––––
1,370
47
33
42
144
186
266
371
139
582
–––––– 1,140 ––––––
1,452
38
37
43
152
195
270
n/an/a
n/a
–––––– n/a –––––– n/a
n/a
n/an/a n/a n/a
n/a
359
123
592
–––––– 1,127 ––––––
1,488
43
36
34
118
152
231
435
131
627
–––––– 1,361 ––––––
1,736
51
45
41
115
156
252
474
143
603
–––––– 1,423 ––––––
1,813
48
37
31
97
128
213
521
150
826
–––––– 1,472 ––––––
2,100
47
42
28
81
109
198
609
242
1,104
–––––– 1,713 ––––––
2,598
55
43
38
83
121
219
621
260
1,170
–––––– 1,906 ––––––
2,871
52
41
39
73
112
205
577
241
1,211
–––––– 1,958 ––––––
2,971
51
43
39
65
104
198
555
226
1,316
–––––– 1,837 ––––––
2,938
55
41
34
85
119
215
552
195
1,386
–––––– 1,695 ––––––
2,885
50
38
31
77
108
196
496
185
1,499
–––––– 1,507 ––––––
2,828
37
41
35
65
100
178
469
168
1,601
––––––1,454 ––––––
2,877
35
47
38
58
96
178
480
181
1,814
––––––1,440––––––
3,062
45
57
43
47
90
192
313
120
1,497
––––––874––––––
2,193
35
62
37
44
81
178
211
45
1,349
––––––751––––––
2,100
705
438
534
114
130
269
n.a.
2,413
92
47
63
World Oil® / NOVEMBER 2016 11
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closed-loop drilling
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