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Show J mm mm mm L , J U.S. OIL AND GAS DRILLING OUTLOOK Continuing emphasis on exploration and development of domestic sources of oil and gas has brought a surge in drilling activity in the U.S. in the past several years. Drill rigs in service on a recent date totaled a near-record 3,858 vs 2,797 a year ago. Such activity is the obvious long-term answer to the world's high oil prices and the vagaries of petroleum politics abroad. DOMESTIC DRILLING BOOM In this country, onshore activity has been devoted largely to development drilling and wildcat exploration forays in deep and or complex geologic formations for-mations where much of our remaining and undiscovered hydrocarbon reserves will likely be found. Offshore, there has been an even stronger surge in drilling. Evidence of this is seen in the large number of rigs under contract and also in the rig construction figures. Today, a tally of offshore rigs being built reads as follows: Submersibles 11, semisubmersibles 44, jackups 161, and drillships 4. These units are scheduled for delivery out to 1983, but even now most are already committed to contracts. Not only are drilling utilization rates at a high level, but brick demand has meant rising charter day rates as contracts come up for renewal. And, although the offshore oil field drilling and services industry has been prone to supply-demand imbalances in the past, the outlook seems favorable for the foreseeable future, at least till 1985. OILFIELD SERVICES With indications of a lively rate of oil and gas drilling over the near term, it follows that demand for oil field services ser-vices will be a high level. Preliminary to drilling, seismic studies establish exploration strategy. With these now at a record, it indicates future drilling with consequent good demand for all types of drill bits. Also of considerable importance is the near-science of secondary recovery of oil from apparently depleted wells. Formerly, with crude prices at low levels, it was uneconomic to devote time and money to secondary recovery. However, with oil prices higher-and undergoing price deregulation-various recovery techniques are. employed to recover the last possible drop of the' "black gold." DRILLING INCENTIVES Both onshore and offshore, incentives for drilling for hydrocarbons are strong. Although right now there seems to be a "glut" in world oil supplies, causing an easing in certain oil price structures and in production, this is a condition not to be relied on. Longer term, the price levels which began climbing in 1979 make drilling for oil and gas attractive from a monetary point of view. This is true even for regions previously too costly to develop because of difficult geological or physical conditions. Improved equipment and techniques also permit offshore operations in far deeper waters. One such venture is guyed tower platform in lOOO-ft.-deep waters off Louisiana. Similar projects will also provide access to the unexplored unex-plored depths of the Outer Continental Shelf. A FEW SHORTCOMINGS While the overall outlook is excellent for offshore drilling and oil field services, ser-vices, there are a handful of minor limitations. As we have already noted, utilization rates are high, but as more new rigs go into service the difficulty in finding enough trained crews becomes a restrictive factor. In addition, from time to time there are bound to be spot shortages in various types of oil field hardware, particularly in drill pipe. However, with the uncertainties of future pricing and production policies of the OPEC cartel, there is no question but that the U. S. will make every effort to reduce our reliance on imported petroleum by stepping up our domestic drilling. |