63rd Annual RIG CENSUS oil® national oilwell varcos 63rd annual rig census

63rd Annual RIG CENSUS

A Special Section of

Published in November 2016

World Oil® / NOVEMBER 2016 3

Global rig utilization at record low levels, U.S. land activity will rebound in 2017

NATIONAL OILWELL VARCO’S 63RD ANNUAL RIG CENSUS

International land and global offshore rig demand continues to drift lower, as markets seek to rebalance. The North American land rig market is slowly improving, after finding a cyclical bottom in late May.

ŝŝ CARLOS HUERTA, National Oilwell Varco

This year’s NOV Annual Rig Census gave us an opportunity to analyze the composition of the global drilling fleet just as the North American land rig markets began to rebound. Land rig utilization during this census period was historically low, at 22% and 15% for the U.S. and Canada, respectively. Around the world, overall land rig demand continues to drift lower, perhaps showing signs of an inflection point in 2017, as oil prices stabilize.

Offshore rig markets continue to be challenged by low E&P activity as a large number of new-builds are expected to be de-livered over the next three years. In response, rig owners have accelerated both the retirement of aged and obsolete assets, as well as the cold-stacking of rigs with lower opportunities of get-ting work in this competitive environment. For the first time in years, the number of scrapped rigs and new cold-stackings combined, was able to offset the 30 new-builds that the market absorbed in the last 12 months.

The precipitous drop in drilling activity, resulting from two consecutive years of contraction in global E&P spending, has caused thousands of rigs to be sidelined since the end of 2014. While our census methodology keeps all rigs that were active in the past three years as “available supply,” it is possible that a large portion of these displaced units will not return to service, facing competition from newer, more capable rigs.

The available and active rig counts used for the census are calculated every year, during a 45-day period in early summer. This year, that period coincided with the lowest reported land rig counts in North America for any year on our records. A widely available industry report, published on May 27, noted that the total land rig count for the U.S. fell to 374 units, or 80% lower than it was during fourth-quarter 2014. Canadian land drilling demand also found an apparent cyclical bottom at just 34 active units on the day our census period began.

The number of available offshore rigs in the world decreased as a result of rig owners working to retire and mothball idle capacity to offset the 30 new units delivered to the market. Available offshore mobile units totaled 782 rigs, with 473 of those rigs performing work during our 45-day window (60% utilization). This represented a decrease of 144 active rigs year-on-year.

CENSUS HIGHLIGHTSKey statistics from the 2016 census include the following:• The U.S. fleet had an overall decline of 188 rigs, causing

the total available count to drop about 5% to 2,242 rigs. This net decrease is the result of 240 rig deletions and 52 rig additions, Fig. 1.

• Utilization of the U.S. fleet (combined land and offshore) declined for the second consecutive year and now stands at 23%, Fig. 2.

• The number of active global offshore mobile units dropped by 29% to 460 units, vs. 647 in the previous cen-sus period.

• Overall, international land rig utilization declined eleven percentage points for 2016 and now stands at 70%.

U.S. RIG ATTRITIONWe define an available rig as one that is currently active or

ready to drill without significant capital expenditure. To be considered available, a land unit must not have been stacked for longer than three years; five years for offshore units. If it can be determined that a rig is cold-stacked, then it is removed from

Fig. 1. U.S. available vs. active rigs, 1955-2016.

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2015201020052000199519901985198019751970196519601955Nu

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Fig. 2. U.S. available rigs vs. utilization 1955-2016.

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4 NOVEMBER 2016 / WorldOil.com


the available fleet. Extensively damaged rigs are also taken out of the available count. Rigs that have moved to other countries are not counted as available in the U.S., however, they may show up in the international tally. All rigs removed from the fleet in each of these cases are totaled as “Deletions to the U.S. Fleet.” There were a total of 240 rig deletions this year, compared with last year’s 1,120 unit decline, and a 10-year average of around 300 deletions per year, Table 1.

The largest number of deleted rigs continues to be in the “Removed from Service” category. This number dropped from 1,086 units in 2014 to 234 units this year, which is closer to the historical average. In the land segment, most of these removals came from rigs being cannibalized to support the operation of other rigs. There were also important cold stacking and scrap-ping efforts on the offshore side, accounting for roughly half of the 234 removals from service.

We did not see as many rigs moving in and out of the U.S. as we did in 2015, when 33 rigs were exported and 14 imported. In 2016, imports and exports of rigs offset each other at three units. Low oil prices have caused the prospect of moving rigs to other countries to be less attractive, as drilling activity in many other parts of the world also remains low.

Rig accidents occasionally occur, and equipment may sus-tain irreparable damage. Irreparable rigs are classified as “De-

stroyed.” Three rigs were classified in this category during this year. This compares with one rig for 2015, and five that were counted as destroyed in the 2014 census.

U.S. RIG ADDITIONSAs the new rig building programs wind down, rig owners

continue to put their new supply into the market, especially if a new rig is committed for long-term contract work. In other cas-es, rig owners have chosen to delay delivery of their new rigs un-til market conditions improve. This is especially true offshore, causing abnormally low new rig additions compared to histori-cal trends. Census figures show that a total of 52 rigs were added to the fleet over the last year, compared with 237 units in 2015, and 387 units in 2014. These additions were not enough to off-set the 240 deletions from the fleet, resulting in a net decrease in the size of the rig fleet for the first time since 2012, Table 1.

The low utilization of the existing U.S. fleet caused the num-ber of new-builds delivered to U.S. drillers to drop more than 70% compared with the 182 new units delivered in 2015. The number of U.S. rigs that were “Reactivated or Assembled from Parts” continued to drop in 2016. This year’s count came in at only eight units, while 41 units were brought back into service in 2015.

Three rigs that “Moved into the Country” are counted as ad-ditions, though this was offset by three units that “Moved Out of the Country.” Therefore, 2016 had zero net imports and ex-ports. This is down from the 14 rigs that moved into the U.S. and 33 that moved out of the country during 2015.

With a total of 52 rig additions and 240 rig deletions, the net change in the fleet over the past year was a 188-unit de-cline, or 5.4%. This is far less than last year’s historic rig count drop of 883 rigs, caused by the significant shift from natural gas to oil drilling in late 2011, but still represents the second consecutive year of fleet size contraction. This compares to a fleet increase of 199 units in 2014, Fig. 3. The U.S. fleet now has 2,242 available rigs.

CANADIAN FLEETThe Canadian available fleet continued to drop in 2016. The

number of rigs removed from service increased as many stacked

Fig. 3. U.S. change in available rigs, 1955-2016.

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Table 1. Changes in the available U.S. fleet.

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006Previous year’s fleet 2,371 3,254 3,055 3,006 3,081 3,153 3,169 3,076 2,817 2,298 2,026

Reductions to fleetRemoved from service –234 –1,086 –177 –182 –386 –315 –212 –164 –59 –77 –99Moved out of the country –3 –33 –6 –22 –23 –16 –45 –49 –29 –14 –14

Destroyed –3 –1 –5 –3 –1 –3 –2 –5 0 –4 –6Subtotal, deletions –240 –1,120 –188 –207 –410 –334 –259 –218 –88 –95 –119

Additions to fleetNewly manufactured 41 182 187 147 223 158 131 237 202 349 238Reactivated or assembled from parts 8 41 194 100 100 98 96 44 132 260 148Moved into the country 3 14 6 9 12 6 16 30 13 5 5Subtotal, additions 52 237 387 256 335 262 243 311 347 614 391

Net change –188 –883 199 49 –75 –72 –16 93 259 519 272

Total available rigs 2,242 2,371 3,254 3,055 3,006 3,081 3,153 3,169 3,076 2,817 2,298

Total Active Rigs 519 1,210 2,269 2,055 2,248 2,059 2,024 1,264 2,541 2,402 2,200

Utilization 23% 51% 70% 67% 75% 67% 64% 40% 83% 85% 96%



rigs were taken out of commission. “Newly Manufactured” units all but came to a halt, and the data did not indicate many reactivations, given the poor prospects for additional work. Losses outpaced gains, and the available fleet size fell as a result.

Rigs “Removed from Service” continue to be the primary cause of Canadian fleet attrition. This includes land rigs idle for more than three years and offshore rigs idle for more than five years, as well as those that might require a considerable capital outlay. There were 46 rigs classified in this category, which were dropped from the census available count. This compares with 181 rigs that were removed from service in 2015.

We could not find clear information regarding the move-ment of rigs in and out of Canada and there were no Canadian units reported as “Destroyed” over the past year. The sum of all deletions for Canada totaled 46 units in 2016.

The number of “Newly Manufactured” rigs entering the Canadian fleet this year was three units, compared with 24 rigs in both 2015 and 2014. Reactivations were also not com-mon during the analysis period, as rig activity was at the cycli-cal low, averaging 48 rigs for the entire second quarter of 2016. There were three rig additions and 46 deletions this year, which caused the Canadian available count to drop to a new 10-year low of 612 units, Table 2.

GLOBAL OFFSHORE MOBILE FLEETThe combination of ongoing deliveries of new units from

backlog into an already oversupplied environment has put tre-

mendous pressure on fleet utilization, which we estimate to be 62% during this census. This is the lowest level observed in the past 16 years. Efforts are being made to adjust rig supply to this new level of demand. Rig owners are postponing delivery of new units, cold-stacking and retiring aged and obsolete assets to reduce their costs.

In this census period, a total of 30 rigs entered the fleet, down from 48 units in the previous year and 63 in 2014. There were 50 rigs retired from the fleet this year and an additional 120 rigs put into long-term stacking. Some of these cold-stacked assets will be reactivated when conditions improve, but there will be some that remain sidelined and eventually demolished. In aggregate, the available global offshore drilling fleet saw a net reduction of 151 rigs to yield a total of 740 available rigs, and of these, 460 units were active during the 45 day census period, Table 3. If an offshore rig has not been active in the past five years and does not have a signed contract, it is removed from the available count until those conditions are met. This prevents rigs that cannot be reactivated quickly from being counted.

There were 30 new offshore rigs delivered in the last year, well below the historical average of 40 units observed between 2009 and 2015. The main reason for the reduction in new unit deliveries is that many offshore drillers are choosing to delay their delivery date to reduce their capital requirements and avoid having new assets idle in their fleet.

The worldwide offshore mobile fleet is widely distributed with the Middle East, Northwest Europe and South America

Table 2. Changes to the Canadian rig fleet.

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006Previous year’s fleet 650 796 777 747 774 795 852 875 871 799 741

Reductions to fleetRemoved from service –46 –181 –38 –52 –67 –63 –94 –17 –24 –6 –7Moved out of the country 0 –8 –11 –21 –33 –11 –17 –42 –19 –10 –8

Destroyed 0 0 0 0 0 0 0 0 –1 0 0Subtotal, deletions –46 –189 –49 –73 –100 –74 –111 –59 –44 –16 –15

Additions to fleetNewly manufactured 3 24 24 64 35 8 15 29 47 86 63Reactivated or assembled from parts 0 12 32 33 34 35 35 2 1 2 10Moved into the country 0 7 12 6 4 10 4 5 0 0 0Subtotal, additions 3 43 68 103 73 53 54 36 48 88 73Net change –43 –146 19 30 –27 –21 –57 –23 4 72 58Total available rigs 612 650 796 777 747 774 795 852 875 871 799Total Active Rigs 91 266 352 289 329 369 334 191 406 371 669Utilization 15% 41% 44% 37% 44% 48% 42% 22% 46% 43% 84%

Table 3. Changes to the global offshore mobile fleet.

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001Previous year’s fleet 891 890 850 824 794 745 705 675 650 654 641 673 678 677 670 n/a

Reductions to fleet Removed from service –179 –50 –22 –17 –18 –7 –2 –11 –7 –26 –10 –42 –15 –2 –2 n/aDestroyed –2 0 –3 –1 –2 0 –4 –3 0 0 –6 –3 –1 –3 0 n/aSubtotal deletions –181 –50 –25 –18 –20 –7 –6 –14 –7 –26 –16 –45 –16 –5 –2 n/a

Additions to fleetNewly manufactured 30 48 63 42 44 47 40 43 28 11 9 4 9 5 8 n/aReactivated or assembled from parts 0 3 2 2 6 9 6 1 4 11 20 9 2 1 1 n/aSubtotal additions 30 51 65 44 50 56 46 44 32 22 29 13 11 6 9 n/aNet Change –151 1 40 26 30 49 40 30 25 –4 13 –32 –5 1 7 n/aTotal Available Rigs 740 891 890 850 824 794 745 705 675 650 654 641 673 678 677 670Total Active Rigs 460 647 725 697 626 559 572 571 592 574 557 545 486 479 460 488Utilization 62% 73% 81% 82% 76% 70% 77% 81% 88% 88% 85% 85% 72% 71% 68% 73%



accounting for 50% of all active rigs during the census period. Active rigs by region, and fleet composition by specific rig type are shown in Fig. 4 and Fig. 5, respectively.

U.S. DRILLING ACTIVITYDrilling activity in the U.S. continued to decline since the

last edition of the census. The number of active rigs tumbled to 519 during the 45-day period, less than half of the number of rigs observed in the early summer of 2015. The methodol-ogy used to count active rigs for the NOV rig census is differ-ent from other published rig counts. The NOV methodology counts a rig as active if it has drilled at any time during a defined

45-day period in late spring. For 2016, the window of activity was May 6 thru June 19. This is in contrast with the procedure used by other published rig counts, which look at weekly activ-ity. Using a longer observation period ensures we do not miss rigs that are active and in transit from one location to another.

This year, overall U.S. rig utilization fell to an unprecedented 23%, compared with 51% in 2015 and 70% in 2014. According to our records, this is the lowest utilization level in the last 61 years since our census was first published in 1955, with 1986 being the second lowest utilization at 26%. However, the speed at which the rig counts collapsed did not allow adequate time to identify those rigs that are less marketable and that will even-tually exit the fleet. This could mean that the number of avail-able rigs is lower than the number calculated by applying our census methodology.

There were 1,723 available rigs in the U.S. that were idle dur-ing this year’s census period. Most of these units are waiting for contracts. These inactive rigs were classified according to the length of time they have been idle. Rigs stacked less than one year totaled 766 units; one to two years, 885 units; and two to three years, 75 units.

Full-year utilization is the ratio of active to available rigs that drilled at any time during the past year. This is another statistic

Fig. 5. Makeup of the global offshore mobile fleet.

Drill barges16 rigs

12 active75% util.

Submersibles*1 rigs

0 active0% util.

Semisubmersibles132 rigs

79 active60% util.

Jackups458 rigs

295 active64% util.

Tenders30 rigs

19 active63% util.

Drillships103 rigs

55 active53% util.

Total fleet = 740Active rigs = 460Utilization = 62%*Arctic rigs are included with submersibles.

This does not include platform and inland barge rigs.

CENSUS GROUND RULES• The geographical breakdown is shown in Table 4.• Contractor-owned rigs are those belonging to companies whose primary business is offering drilling contracting services.• To be considered active, a rig must be drilling at least one day during the 45-day qualification period during the early sum-

mer of each year. • Only workable rotary rigs are included; cable tool rigs are excluded.• To be considered available, a rig must be able to go to work without requiring a significant capital expenditure. • Rotary land rigs stacked for an extended period of time, typically three years or longer, are not counted as available. Offshore

rigs must not be stacked for longer than five years.• A rig must be capable of, and normally employed for, drilling deeper than 3,000 ft. Therefore, some shallow drilling rigs are

excluded, but this is necessary to ensure that well-servicing rigs are not counted.• Electric rigs include all those that transmit power from prime movers to electrically driven equipment.• Inland barges include barge-mounted rigs that may be moved from one location to another via canal, bayou or river, and

drill in sheltered inland waters. Offshore rigs include stationary platform units (both self-contained and tender-supported), bottom-supported mobile units, and floating rigs (both drillships and semisubmersibles).

Fig. 4. 2016 global offshore mobile fleet by region.

US Alaska 0.00%Canada Other 0.00%Baltic 0.22%Canada East 0.44%Central America 1.09%Australia/New Zealand 1.17%Caspian 1.53%Med/Black Sea 2.62%

Mexico 5.68%West Africa 5.87%U.S. GOM 6.93%SE Asia 8.00%Far East 8.37%Indian Ocean 8.92%South America 9.94%NW Europe 14.21%Middle East 25.01%



used to measure overall fleet dynamics. Adding the 519 active rigs to the 766 rigs stacked less than one year provides the total number of rigs that drilled between the end of the 2015 census and the end of the 2016 census.

Census results for the U.S. are also calculated by region. All U.S. regions had decreases in both available and active rigs in 2016. The year-to-year breakdown for 2014 and 2015 is shown in Table 4. The regions hit the hardest this year were the North-ern Rockies, where utilization fell to 13% and the Gulf Coast, where activity decreased 65% after a loss of 114 active rigs. Cali-fornia also saw a low utilization level of 14%, dropping 22 rigs compared to last year.

The regional figures above are a combination of land and off-shore statistics. When studying U.S. land rigs, the 2016 utiliza-tion rate declined to 23%, compared to 52% deployed in 2015. The U.S. marine mobile fleet also had a considerable utilization drop in 2016 to just 54% versus 69% last year. Demand for ex-ploration and development offshore rigs by type varied greatly, with jackup rigs having the lowest utilization at 39%, and semi-submersible rigs having the highest utilization of 60%.

By analyzing the U.S. land fleet, we can compare rigs by their drilling depth capacity. The land rigs with the highest utiliza-tion rate were the largest rigs, having depth capacity greater than 20,000 ft, at 30% utilization, while the lowest were those in the 10,000 ft to 12,999 ft-range at 13%. This makes sense, since horizontal drilling has dominated activity in the country, and wells with long horizontal departures require bigger rigs that can generate higher-torque and sufficient hoisting capacity to drill these wells efficiently, Table 5.

CANADIAN DRILLING ACTIVITYYear-to-year drilling activity in Canada fluctuates with com-

modity prices and the timing of the spring breakup, when rig moving is restricted in environmentally sensitive areas. Dur-ing the 2016 census, Canadian rig activity fell 65%. After hav-ing surged to 352 active rigs in 2014, the active count was 91 units during the 45-day census window between May 6 to June

19. Since the majority of these rigs became inactive within the last two years and, therefore, are still considered available under census methodology, we find that active utilization in Canada dropped to an extremely low 15%, Fig. 6.

Segmenting the Canadian fleet by depth capacity, 34% of available rigs are rated between 10,000 ft and 13,000 ft, followed by 25% of units between 13,000 ft and 16,000 ft. Utilization by depth capacity indicates that those rigs with ratings 20,000 ft and over have the greatest utilization levels. This is consistent with the proliferation of unconventional oil and gas activity that requires longer horizontal sections, increasing overall measured depth of the well.

INTERNATIONAL LAND RIG UTILIZATIONInternational utilization is estimated on a regional basis.

This year, NOV developed a new methodology to derive more accurate “marketed” utilization in each region. We increased the granularity and frequency of observations, and compared that with information from our representatives in each region. Us-ing the new approach, we estimate 2016 international land rig availability at 3,172 units, of which 2,205 were active during the census period. This results in a global land rig utilization level of 70%, down from our estimated 80% in last year’s census.

Fig. 6. Canadian available vs. active rigs, 2002-2016.

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Table 4. U.S. regional census results.

Ownership Power source Rig type Bottom TotalRegion Year Available Active Utilization Driller Operator Mechanical SCR/Electric Land Barge Floating Platform Supported Offshore

Alaska 2016 20 5 25% 15 1 5 15 20 0 1 0 1 2 2015 25 15 60% 22 3 3 22 23 0 1 0 1 2Northern 2016 262 34 13% 236 31 36 226 262 0 0 0 0 0 Rockies 2015 244 108 44% 218 26 36 208 244 0 0 0 0 0Southern 2016 172 34 20% 168 4 90 82 172 0 0 0 0 0 Rockies 2015 189 113 60% 165 24 106 83 189 0 0 0 0 0Northeast 2016 215 43 20% 204 11 96 119 215 0 0 0 0 0 States 2015 237 125 53% 192 45 111 126 237 0 0 0 0 0Permian 2016 625 166 27% 584 41 265 359 625 0 0 0 0 0 Basin 2015 552 295 53% 507 45 225 327 552 0 0 0 0 0Gulf Coast 2016 321 61 19% 303 18 71 250 321 1 1 2 2 6 2015 370 175 47% 332 38 95 275 357 1 3 2 7 13ArkLaTex 2016 105 28 27% 99 6 23 82 105 0 0 0 0 0 2015 146 87 60% 130 16 72 74 146 0 0 0 0 0California 2016 58 8 14% 55 3 32 26 58 0 0 4 0 4 2015 80 26 33% 69 11 48 32 75 0 1 4 0 5Southeast 2016 22 7 32% 22 0 9 13 22 21 40 31 15 107 States 2015 213 97 46% 200 13 49 164 55 34 57 31 36 158Mid- 2016 300 71 24% 240 60 122 178 300 0 0 0 0 0 Continent 2015 315 169 54% 246 69 129 186 315 0 0 0 0 0Total 2016 2100 457 22% 1926 175 749 1350 2100 22 42 37 18 119 2015 2371 1210 51% 2081 290 874 1497 2193 35 62 37 44 178



The Latin American region had the lowest land rig utilization, with an esti-mated 41%. In Mexico, lower oil prices forced producers to cut-back on opera-tions in the southern region and focus their investment on the continental shelf and exploration activities. In Colombia, the high cost of production caused the rig count to drop by more than 80%, result-ing in excessive idle capacity in the coun-try, where usual activity was in the 40-50 rig range. Argentina also saw its active rig count drop, however, this market is more stable than the rest of the region, post-ing one of the highest utilization rates in the mid 70%.

In Europe, low activity prevailed, but a relatively low number of rigs in the region kept utilization high at 72%. We estimate Russia provides virtually all of the rig count in the region, and our census puts the country’s land rig utilization close to 80%.

In Africa, land rig utilization was esti-mated at 53%, having 69 active units and 129 rigs available for the purposes of this census. Algeria, which is fully utilized, and Kenya at 85%, are the strongest in the area in terms of activity. Our estimates for Nigeria point to a 30% utilization of their land fleet.

In Asia, India and China are the top two strongest markets, with Indonesia coming in third. We estimate the Asia-Pacific/China regional utilization at 77%, with a combined 740 active rigs during the census period.

Within the Middle East, the UAE and Qatar are essentially fully employed, with Saudi Arabia running 106 of its 113 available rigs, resulting in a 94% uti-lization rate. Kuwait utilized 83% of its 53 available rigs in country. However, the region did not show an increase in rig activity as a result of recovering oil prices, Table 6.

GLOBAL OFFSHORE MOBILE ACTIVITY

The activity level for the global off-shore mobile fleet continued to decline, with 460 rigs active in 2016, which is a decrease of 187 units, or 29%, compared with 2015. After peaking at 725 active rigs during the 2014 census, the number of active rigs has declined 37%, while the available fleet has only shrunk 17% over the same period, leaving many rigs idle in an environment that offers few opportu-nities for incremental work. As a result,

Table 5. U.S. rig utilization by depth capacity.

Depth rating, ft Over 16,000 to 13,000 to 10,000 to 6,000 to 3,000 to By region Status 20,000 19,999 15,999 12,999 9,999 5,999 TotalAlaska Available 9 1 5 4 1 0 20 Active 3 0 0 2 0 0 5 Idle 6 1 5 2 1 0 15 Utilization, % 33% 0% 0% 50% – – 25%Northern Available 118 92 33 16 2 1 262Rockies Active 21 11 2 0 0 0 34 Idle 97 81 31 16 2 1 228 Utilization, % 18% 12% 6% 0% 0% 0% 13%Southern Available 10 40 44 31 39 8 172Rockies Active 6 7 6 2 10 3 34 Idle 4 33 38 29 29 5 138 Utilization, % 60% 18% 14% 6% 26% 38% 20%Northeast Available 58 44 37 29 39 8 215States Active 17 11 5 3 5 2 43 Idle 41 33 32 26 34 6 172 Utilization, % 29% 25% 14% 10% 13% 25% 20%Permian Available 203 113 124 133 43 9 625Basin Active 85 33 18 19 8 3 166 Idle 118 80 106 114 35 6 459 Utilization, % 42% 29% 15% 14% 19% 33% 27%Gulf Coast Available 180 48 41 26 14 12 321 Active 30 11 5 7 6 2 61 Idle 150 37 36 19 8 10 260 Utilization, % 17% 23% 12% 27% 43% 17% 19%ArkLaTex Available 31 34 18 15 7 0 105 Active 16 5 4 3 0 0 28 Idle 15 29 14 12 7 0 77 Utilization, % 52% 15% 22% 20% – – 27%California Available 12 10 2 16 12 6 58 Active 0 1 1 1 3 2 8 Idle 12 9 1 15 9 4 50 Utilization, % 0% 10% 50% 6% 25% 33% 14%Southeast Available 9 5 6 2 0 0 22States Active 2 0 3 2 0 0 7 Idle 7 5 3 0 0 0 15 Utilization, % 22% 0% 50% 100% – – 32%Mid- Available 95 62 72 52 18 1 300Continent Active 40 17 10 3 1 0 71 Idle 55 45 62 49 17 1 229 Utilization, % 42% 27% 14% 6% 6% 0% 24%By rig type Inland Available 12 4 6 22Barge Active 4 1 1 0 0 0 6 Idle 8 3 5 0 0 0 16 Utilization, % 33% 25% 17% – – – 27%Floating Available 41 0 0 1 0 0 42 Active 25 0 0 0 0 0 25 Idle 16 0 0 1 0 0 17 Utilization, % 61% – – 0% – – 60%Land Available 725 449 382 324 175 45 2,100 Active 220 96 54 42 33 12 457 Idle 505 353 328 282 142 33 1,643 Utilization, % 30% 21% 14% 13% 19% 27% 22%Offshore Available 14 7 4 6 36 0 67Platform Active 4 1 1 2 11 0 19 Idle 10 6 3 4 25 0 48 Utilization, % 29% 14% 25% 33% 31% – 28%Bottom Available 13 4 1 0 0 0 18Supported Active 5 2 0 0 0 0 7 Idle 8 2 1 0 0 0 11 Utilization, % 38% 50% 0% 39%Total Available 805 464 393 331 211 45 2,249 Active 258 100 56 44 44 12 514 Idle 547 364 337 287 167 33 1,735 Utilization, % 32% 22% 14% 13% 21% 27% 23%

Table 6. International land rig utilization. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Europe/FSU/Russia 96% 97% 90% 78% 86% 80% 94% 75% 96% 96% 72%Africa 99% 86% 85% 70% 77% 83% 96% 83% 87% 75% 53%Middle East 88% 94% 94% 82% 90% 97% 100% 94% 100% 99% 75%Asia/China 97% 95% 96% 93% 96% 96% 96% 96% 86% 67% 77%Latin America 92% 90% 90% 81% 74% 93% 88% 80% 84% 67% 41%Overall 95% 94% 92% 84% 88% 90% 95% 85% 91% 81% 70%



utilization of the fleet dropped from 73% in 2015 to a record low in the last 15 years of 62% for 2016, Fig. 7.

U.S. INDUSTRY TRENDSThe number of rig owners holding available rigs is also

counted. In recent years, the number of owners had somewhat leveled off, with the number of new drilling companies added balancing closely with the number of companies ceasing opera-tions. For 2016, the net number of rig owners declined. Com-pany closures, mergers and acquisitions, and the number of rigs failing to qualify as active in our analysis, all contributed to a net reduction of 32 companies this year. The total number of rig owners is now 218 in 2016 compared with 250 last year. In the 2016 census, the number of land drilling rigs owned by opera-tors fell to 175, or 8% of the available fleet, Fig 8. This is down 115 units from previous year, where operators owned 13% of all available rigs in the country.

In the U.S., there is some indication that the lengthening of lateral sections could lead to the need for larger, more power-ful rigs to drill these sections, Fig. 9. While some areas are at the lateral length limit due to land restrictions, other areas will continue to seek longer horizontal sections, which could lead to a new class of land rigs coming to market to satisfy this demand.

U.S. FORECAST FOR 2017While it would be ambitious to predict the exact effect on

the drilling rig fleet for the future, it now looks as if the cycli-cal demand bottom is behind us. As oil prices stabilize and the historically high levels of oil inventories continue to be worked off, we should see an increasing need for new wells and more rigs being contracted. Some of the most widely distributed fore-casts point to a sharp bounce in U.S. drilling, particularly on the land side. However, we should keep in mind that incremental activity will come in an environment of intense competition among drillers, due to the large number of idle rigs that will be battling for work.

The proliferation of unconventional activity over the last de-cade showed that rigs that are best suited for horizontal drilling in multi-well pads will hold the preference of oil and gas compa-nies. While supply is abundant at current levels, the utilization level of these assets will continue to rise, requiring upgrading or new-building activity to satisfy demand.

ACKNOWLEDGEMENTNOV partnered with several companies to collect the industry statistics used in this article. IHS Drilling Data and RigData are the primary sources used for the U.S. land rig fleet and global offshore

mobile fleet. Information for some areas, particularly the international fleet, was collected and ana-lyzed by NOV personnel. The following individuals are recognized for their specific contributions to this year’s rig census: Jacoby Garcia (RigData); Diane Henderson ( JWN Energy); Jesus Varela, Steve Thompson, Robin Macmillan, and Michael Gaines (NOV).

CARLOS HUERTA is director of technical marketing and research at NOV Rig Systems. He began his career as a field engineer for ReedHycalog in 2002. Since then, he has held positions in the drilling optimization, product line management, business development and sales organizations before moving to the corporate technical marketing team at NOV. Mr. Huerta holds a

BS degree in chemical engineering from Tecnológico de Monterrey, Mexico, and is a candidate in Rice University’s Executive MBA program.

Fig. 7. Global offshore mobile available vs. active rigs, 2001-2016.

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Fig. 8. U.S. rig owners, 1987-2016.

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20152013201120092007200520032001199919971995199319911989

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Note: 2002 data point is an estimate.

Fig. 9. Some of the longest laterals in the U.S. are drilled in North Dakota, where this large rig is working on behalf of Hess Corporation in the Bakken Shale. Image: Hess Corporation.



U.S. Rig Census historical data, 1955–2016.

Depth rating, ft Power source Rig type

Unit % Util. Driller Operator Over 16,000 to 13,000 to 10,000 to 6,000 to 3,000 to Mechanical Inland Offshore Bottom Offshore SubtotalYear Available change change Active rate Idle owned owned 20,000 19,999 15,999 12,999 9,999 5,999 SCR/Elec. Diesel Gas Steam Land barge Floating platform supported stationary offshore1955 3,206 – – 2,654 83% 552 2,806 400 –––––– 104 –––––– 445 613 1,237 807 30 n.a. n.a. 285 2,996 162 10 –––––– 38 –––––– 38 2101956 3,277 71 2% 2,836 87% 441 2,911 366 –––––– 110 –––––– 453 562 1,256 896 34 n.a. n.a. 247 3,025 175 14 –––––– 63 –––––– 63 2521957 3,076 –201 –6% 2,519 82% 557 2,796 280 –––––– 111 –––––– 425 553 1,075 912 52 n.a. n.a. 195 2,793 184 32 –––––– 67 –––––– 67 2831958 2,971 –105 –3% 1,909 64% 1,062 2,735 236 –––––– 141 –––––– 405 487 1,067 871 49 n.a. n.a. 158 2,715 185 37 –––––– 34 –––––– 34 2561959 3,057 86 3% 2,476 81% 581 2,848 209 –––––– 184 –––––– 424 520 996 933 54 n.a. n.a. 113 2,811 190 34 –––––– 22 –––––– 22 2461960 3,077 20 1% 2,150 70% 927 2,874 203 –––––– 210 –––––– 378 477 1,033 979 73 1,039 1,864 101 2,837 178 39 –––––– 23 –––––– 23 2401961 2,774 –303 –10% 2,064 74% 710 2,606 168 –––––– 193 –––––– 356 399 937 889 66 1,092 1,549 67 2,535 173 28 –––––– 38 –––––– 38 2391962 2,555 –219 –8% 1,835 72% 720 2,406 149 –––––– 218 –––––– 307 471 823 736 63 913 1,525 54 2,300 178 41 –––––– 36 –––––– 36 2551963 2,781 226 9% 2,002 72% 779 2,672 109 –––––– 272 –––––– 298 479 964 768 106 1,027 1,600 48 2,514 179 50 –––––– 38 –––––– 38 2671964 2,752 –29 –1% 2,048 74% 704 2,644 108 –––––– 305 –––––– 251 463 1,029 704 113 1,040 1,577 22 2,479 162 50 –––––– 61 –––––– 61 2731965 2,614 –138 –5% 1,934 74% 680 2,531 83 –––––– 322 –––––– 242 449 936 665 138 1,051 1,404 21 2,343 144 67 –––––– 60 –––––– 60 2711966 2,524 –90 –3% 1,714 68% 810 2,472 52 –––––– 350 –––––– 206 461 863 644 164 964 1,376 20 2,259 128 58 –––––– 79 –––––– 79 2651967 2,408 –116 –5% 1,573 65% 835 2,359 49 –––––– 375 –––––– 199 435 776 623 206 955 1,239 8 2,114 121 72 –––––– 101 –––––– 101 2941968 2,111 –297 –12% 1,508 71% 603 2,067 44 –––––– 372 –––––– 185 381 680 493 189 882 1,037 3 1,825 114 77 –––––– 95 –––––– 95 2861969 2,060 –51 –2% 1,649 80% 411 2,033 27 –––––– 366 –––––– 188 352 626 528 177 952 928 3 1,827 98 50 –––––– 85 –––––– 85 2331970 1,898 –162 –8% 1,331 70% 567 1,869 29 –––––– 343 –––––– 219 322 580 434 154 895 847 2 1,662 106 55 –––––– 75 –––––– 75 2361971 1,859 –39 –2% 1,308 70% 551 1,832 27 –––––– 361 –––––– 198 329 535 436 170 937 750 2 1,592 124 62 –––––– 81 –––––– 81 2671972 1,768 –91 –5% 1,381 78% 387 1,741 27 –––––– 397 –––––– 171 301 490 409 176 955 637 0 1,551 77 60 –––––– 80 –––––– 80 2171973 1,767 –1 0% 1,473 83% 294 1,739 28 –––––– 413 –––––– 164 318 517 355 164 1,007 596 0 1,570 71 59 –––––– 67 –––––– 67 1971974 1,894 127 7% 1,769 93% 125 1,881 13 –––––– 425 –––––– 214 339 529 397 159 1,200 535 0 1,715 66 54 –––––– 59 –––––– 59 1791975 2,028 134 7% 1,877 93% 151 2,014 14 –––––– 448 –––––– 225 380 579 396 164 1,339 525 0 1,839 74 58 –––––– 57 –––––– 57 1891976 2,204 176 9% 1,979 90% 225 2,180 24 –––––– 498 –––––– 239 366 633 468 192 1,535 476 1 1,964 76 81 –––––– 83 –––––– 83 2401977 2,482 278 13% 2,399 97% 83 2,451 31 –––––– 577 –––––– 274 461 628 542 217 1,943 321 1 2,186 77 120 –––––– 99 –––––– 99 2961978 2,851 369 15% 2,785 98% 66 2,818 33 –––––– 693 –––––– 313 565 723 557 283 2,309 259 0 2,524 91 123 –––––– 113 –––––– 113 3271979 3,182 331 12% 2,874 90% 308 3,144 38 –––––– 872 –––––– 350 631 783 546 420 2,521 241 0 2,802 109 144 –––––– 127 –––––– 127 3801980 3,672 490 15% 3,542 96% 130 3,626 46 –––––– 1,059 –––––– 419 704 885 605 490 3,023 159 0 3,255 115 34 149 119 268 4171981 4,803 1131 31% 4,703 98% 100 4,762 41 –––––– 1,405 –––––– 595 950 1,080 773 656 4,000 146 1 4,316 161 32 155 139 294 4871982 5,644 841 18% 3,225 57% 2,419 5,606 38 –––––– 1,717 –––––– 717 1104 1,285 821 896 4,647 100 1 5,139 157 25 167 156 323 5051983 5,273 –371 –7% 2,539 48% 2,734 5,241 32 –––––– 1,639 –––––– 662 993 1,233 746 851 4,344 77 1 4,832 128 31 129 153 282 4411984 4,580 –693 –13% 3,090 67% 1,490 4,553 27 –––––– 1,408 –––––– 591 933 1,077 571 771 3,747 61 1 4,102 131 51 123 173 296 4781985 4,409 –171 –4% 2,625 60% 1,784 4,386 23 –––––– 1,332 –––––– 570 894 1,084 529 748 3,621 40 0 3,940 121 58 107 183 290 4691986 3,993 –416 –9% 1,052 26% 2,941 3,961 32 –––––– 1,220 –––––– 496 789 971 517 815 3,139 39 0 3,573 90 70 89 171 260 4201987 3,331 –662 –17% 1,388 42% 1,943 3,299 32 –––––– 991 –––––– 427 637 841 435 681 2,626 24 0 2,956 91 53 77 154 231 3751988 2,752 –579 –17% 1,532 56% 1,220 2,716 36 –––––– 771 –––––– 365 529 751 336 561 2,167 24 0 2,429 63 48 62 150 212 3231989 2,542 –210 –8% 1,444 57% 1,098 2,508 34 –––––– 704 –––––– 329 515 700 294 498 2,025 19 0 2,249 63 40 60 130 190 2931990 2,320 –222 –9% 1,677 72% 643 2,294 26 399 221 313 488 623 276 408 1,891 21 0 2,061 54 30 46 129 175 2591991 2,251 –69 –3% 1,485 66% 766 2,209 42 380 210 304 491 603 263 438 1,798 15 0 2,006 51 24 48 122 170 2451992 1,996 –255 –11% 1,192 60% 804 1,956 40 315 175 267 441 553 245 395 1,589 12 0 1,809 47 20 41 79 120 1871993 1,853 –143 –7% 1,279 69% 574 1,806 47 303 152 240 420 513 225 380 1,460 13 0 1,660 46 19 36 92 128 1931994 1,841 –12 –1% 1,221 66% 620 1,789 52 326 147 245 411 499 213 418 1,402 21 0 1,613 45 21 39 123 162 2281995 1,729 –112 –6% 1,232 71% 497 1,680 49 317 148 239 393 453 179 414 1,305 10 0 1,500 45 19 43 122 165 2291996 1,649 –80 –5% 1,263 77% 386 1,597 52 311 139 221 384 435 159 408 1,234 7 0 1,425 46 22 39 117 156 2241997 1,665 16 1% 1,447 87% 218 1,606 59 339 137 230 387 421 151 456 –––––– 1,209 –––––– 1,428 44 28 42 123 165 2371998 1,705 40 2% 1,305 77% 400 1,640 65 376 142 238 391 412 146 497 –––––– 1,208 –––––– 1,449 47 35 45 129 174 2561999 1,644 –61 –4% 860 52% 784 1,599 45 375 134 232 368 395 140 499 –––––– 1,145 –––––– 1,384 46 37 45 132 177 2602000 1,636 –8 0% 1,215 74% 421 1,557 79 392 134 231 355 381 143 520 –––––– 1,116 –––––– 1,370 47 33 42 144 186 2662001 1,722 86 5% 1,593 93% 129 1,643 79 424 161 254 373 371 139 582 –––––– 1,140 –––––– 1,452 38 37 43 152 195 2702002 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a –––––– n/a –––––– n/a n/a n/a n/a n/a n/a n/a2003 1,719 –3 0% 1,334 78% 385 1,648 71 390 205 274 368 359 123 592 –––––– 1,127 –––––– 1,488 43 36 34 118 152 2312004 1,988 269 16% 1,674 84% 314 1,896 92 424 230 295 473 435 131 627 –––––– 1,361 –––––– 1,736 51 45 41 115 156 2522005 2,026 38 2% 1,920 95% 106 1,962 64 375 251 311 472 474 143 603 –––––– 1,423 –––––– 1,813 48 37 31 97 128 2132006 2,298 272 13% 2,200 96% 98 2,191 107 394 287 384 562 521 150 826 –––––– 1,472 –––––– 2,100 47 42 28 81 109 1982007 2,817 519 23% 2,402 85% 415 2,511 306 453 347 508 658 609 242 1,104 –––––– 1,713 –––––– 2,598 55 43 38 83 121 2192008 3,076 259 9% 2,541 83% 535 2,698 378 471 378 605 741 621 260 1,170 –––––– 1,906 –––––– 2,871 52 41 39 73 112 2052009 3,169 93 3% 1,264 40% 1,905 2,729 440 478 449 670 754 577 241 1,211 –––––– 1,958 –––––– 2,971 51 43 39 65 104 1982010 3,153 –16 –1% 2,024 64% 1129 2,702 451 517 472 662 721 555 226 1,316 –––––– 1,837 –––––– 2,938 55 41 34 85 119 2152011 3,081 –72 –2% 2,059 67% 1,022 2,626 455 498 523 646 667 552 195 1,386 –––––– 1,695 –––––– 2,885 50 38 31 77 108 1962012 3,006 –72 –2% 2,248 75% 758 2,567 439 514 589 606 616 496 185 1,499 –––––– 1,507 –––––– 2,828 37 41 35 65 100 178

2013 3,055 49 2% 2,055 67% 1,000 2,625 430 706 561 551 600 469 168 1,601 ––––––1,454 –––––– 2,877 35 47 38 58 96 178

2014 3,254 199 7% 2,269 70% 985 2,782 472 782 645 567 599 480 181 1,814 ––––––1,440–––––– 3,062 45 57 43 47 90 192

2015 2,371 –883 –27% 1,210 51% 1,161 2,081 290 803 429 386 320 313 120 1,497 ––––––874–––––– 2,193 35 62 37 44 81 178

2016 2,100 –271 –11% 455 22% 1,645 1,925 175 805 464 393 331 211 45 1,349 ––––––751–––––– 2,100

AVG. 2,677 –14 2% 1,912 73% 765 2,558 129 533 291 363 527 705 438 534 n.a. 2,413 92 47 63 114 130 269

Note: The data for 1953, 1954 and 2002 are not available.

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63rd Annual RIG CENSUS oil® national oilwell varcos 63rd annual rig census

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