Global oil glut hidden by rig dearth makes drillers good bet

The professionals most familiar with the so-called oil shortage know there is an estimated 3tn barrels under land and sea. That is why they are making their biggest bets in drilling rigs where the scarcity is no illusion.
Oil drillers “are the most attractive way to go,” said Don Hodges, who holds about 160,000 shares of Transocean Inc and about 120,000 shares of GlobalSantaFe Corp among the $1.1bn managed by Dallas-based Hodges Capital Management. “There is a shortage, it takes time to build one and it takes a lot of money. Their earnings are going to go up every year for the foreseeable future.”
“There’s a fight for resources in the entire industry, not only rigs,” Norsk Hydro chief executive officer Eivind Reiten said in an interview. “That;s putting pressure on costs, and may challenge the progress of some of the projects, but my company, Hydro, is fortunate in being well positioned there.”
Oslo-based Hydro is Norway’s second-largest oil company.
The number of offshore drilling rigs on order at shipyards, a measure of demand, has jumped to 115 from 18 five years ago, according to ODS-Petrodata. With few rigs yet delivered, the number of offshore rigs operating worldwide is little changed in the past five years, at 657.

Gulf Times