The international rig count is only down about 10% year-over-year while the North America (NAM) rig count is down about 50% over the same period. While the international oilfields tend to be less cyclical than the NAM rig count (learn why here), the wide difference is due in part to the fact that some country markets outside the US are actually booming right now. Namely the OPEC powerhouses of the Middle East.Today, Baker Hughes released its monthly international drilling stats. The rig count data shows the OPEC leadership’s commitment to gaining market share and supplying the markets with their lower cost barrels in spite of depressed oil prices. While traders bidding up oil prices have been focused on the US oil rig count decline, we submit they should also be paying attention to the counter cyclical trend playing out in some oilfields of the Middle East.Saudi Arabia is running more rigs today than ever before and the rig counts in Oman, Algeria, and Kuwait look strong. Outside of the Middle East, Argentina is hitting record high drilling activity levels, and Indonesia’s rig count is tracking above year-ago levels. Across most of Europe and Latin America though, the rig count trend is lower.Below is a snapshot of the country markets outside of North America that are booming. The busts are shown as well to provide some context. Notably, while some of the Middle Eastern powerhouses are seeing strength, other countries in the region are seeing their rig counts fall and fall significantly. In the Middle East, not everyone is winning. It’s also important to note that booming activity in the Middle East does benefit foreign companies. The big oil service companies work on large contracts in the area, and the majors also partner with country NOCs to exploit these resources

Monthly International Drilling Activity Trends

For the month of April, the international rig count fell 49 rigs to 1,202 per Baker Hughes. This excludes the US, Canada, Russia, and China, which we estimate are home to some 2,500 additional working rigs. Year-over-year, the international rig count is down 147 units.

Following the financial crisis of 2008/2009, the international rig count declined 161 rigs, about 15%. Whether the rig count decline this time far exceeds that of 2008/2009 depends on whether the nascent oil price recovery can hold. As shown below, land activity tends to drive trends in the overall international rig count as about 75% of non-North American rigs are drilling onshore.

Of the non-NAM countries tracked by Baker Hughes, Saudi Arabia leads on size with 126 rigs, followed by India with 110, and Argentina with 107.

Driven by record high activity levels in Saudi Arabia, Middle East activity is trending higher.

With drilling activity in Brazil and Mexico falling off, Latin America drilling is trending lower.

European activity had assumed a nice growth trajectory over the past five years, with much of the growth coming from outside the traditional European oil & gas powerhouses (UK, Norway, and Netherlands). However, the oil price collapse has derailed the trend and European drilling is trending lower now.

The real driver in the Asia Pac region is offshore activity, and all things considered, that activity is holding up relatively well so far. But longer duration contracts offshore tend to create a lag effect in the drilling response to commodity price collapses.

Aurthur: Joseph Triepke

Source: http://oilpro.com/post/12839/drilling-still-booming?utm_source=DailyNewsletter&utm_medium=email&utm_campaign=newsletter&utm_term=2015-05-07&utm_content=Article_2_txt