Westwood Global Energy Group has revealed that the global offshore rig market closed out 2021 up 200% in activity from the previous year.
The specialist energy market research and consultancy company said rig activity had been stimulated by significant engineering, procurement and construction spend and was valued at $41.7bn in 2021, on par with 2019 levels.
Global rig contract fixtures totalled 142 in the fourth quarter of 2021, representing 54,829 rig days, which was an 155% increase compared to the previous quarter.
Alex Middleton, Senior Market Analyst at Westwood said: “Several major drilling regions, including North America, South America and the Middle East have experienced minimal fallout. In fact, South America has fared particularly well, ending last year in better shape than before the pandemic. Brazil remained particularly buoyant, with high EPC spend coupled with no instances of contract cancellations resulting in continued drilling throughout the period.”
Nevertheless, Africa, Southeast Asia, and the North Sea were lagging as a result of drilling projects that were in limbo in a climate of political and legal uncertainty.
Westwood cited the Cambo project in the UK as a case in point. Cambo has been put on hold after Shell withdrew from the development and Siccar Point Energy, the operator, was unable to continue.
SPE has a 70% stake in Cambo and says it could produce 170 million barrels of oil over 25 years and 53.5 billion cubic feet of gas. The exploration licence is due to expire in March this year.
Middleton said: “For these regions (Africa, Southeast Asia and North Sea), contracted rigs have been on a downward trajectory, hitting rock bottom at the close of 2020. Drilling projects have been halted amidst uncertainty, however, there are several major projects on the horizon that, if picked up, could help drive a recovery.”
