The Oil Drum: Of Rigs and Pipelines

A year ago the perception of a problem with oil supply was much less evident than today. While Saudi Arabia had a plan to increase production, it was using only some 30-odd drilling rigs, and the debate over its capabilities was not being widely discussed. Now that Aramco has committed to an increased level of production, they have also had to increase their drilling fleet to a target of around 100 rigs. (From Baker Hughes it is currently about 46 onshore and 6 offshore ). Because drilling rigs are made of special steels and require some sophistication in manufacture they are built in only a few places, and there is a growing lead-time on getting a new one. Thus demand for existing rigs is high, and rental costs are going up. This is impacting the US supply…this post explores some of the facts of rigs and pipelines.
Much more after the jump to The Oil Drum.