HOUSTON--(BUSINESS WIRE)--Oil and gas drilling in the U.S. has recovered much of the momentum it lost in 2009 and will increase more than 10 percent, predict editors at World Oil, an industry technical trade journal in its 2011 Upstream Forecast Report delivered to about 200 industry analysts, investors and oilfield executives.
Often used as a barometer for the overall health of the upstream oil and gas industry, the Upstream Forecast predicts a continued shift in drilling from natural gas resources to oil this year, driven by rising oil prices and stagnant natural gas prices. The Upstream Forecast also called for increased drilling in the burgeoning U.S. shale plays, particularly oil- and condensate-rich shale such as the Bakken in North Dakota and the Eagle Ford in South Texas.
“Despite last year’s six-month deepwater drilling moratorium in the Gulf of Mexico and slow permitting even in shallow water, many rigs stayed busy by performing workovers and other activities on existing wells,” said David Cohen, managing editor of World Oil. He estimates that 180 wells were drilled in U.S. Gulf waters in 2010 and predicts a 27.8 percent increase this year to 230 new wells.
In the onshore U.S., World Oil’s Upstream Forecast expects that Texas will have the biggest increase in drilling this year with 2,847 more wells drilled than in 2010. The state’s Eighth District alone, which holds the conventional Permian Basin oil play, will have an increase of more than 1,400 wells compared to last year, driven by rising oil prices. Texas has 12 oil and gas districts organized under the state Railroad Commission.
World Oil Editor Pramod Kulkarni cites another interesting prediction of the Upstream Forecast regarding gas drilling.
“The number of rigs drilling for oil in the U.S. will likely overtake the number drilling for gas this year, after decades of gas-dominated drilling activity,” he said. Kulkarni forecasts the average natural gas price at Louisiana’s Henry Hub at $4.30 per thousand cubic feet (Mcf), about 9 cents less than the 2010 average. He also said that an extended period of oil prices above $100 per barrel was unlikely, given recent statements from OPEC indicating a willingness to produce its spare capacity in order to avoid this “unsustainable” price.
Outside of the U.S., drilling rose 10 percent last year to an estimated 51,483 wells, with another 1.7 percent increase expected this year to 52,369 new wells, according to Nell Lukosavich, World Oil senior editor.
“The biggest increase will be in the Middle East, led by Saudi Arabia,” said Lukosavich. “Shale gas exploration operations will continue to gain momentum throughout Europe, with several aggressive projects scheduled in Poland and Germany.” Additionally, drilling is also expected to increase offshore Norway, the United Kingdom and Southeast Asia. Onshore South America, namely in Venezuela, Brazil and Colombia, is also predicted to see a boost in activity in 2011.
For more information about the 2011 Upstream Forecast, please contact World Oil Managing Editor David Cohen at David.Cohen@worldoil.com.
About World Oil
World Oil ® magazine, the leading oil and gas trade journal for the exploration, drilling and production sector, has a worldwide circulation of 35,000 readers. Gulf Publishing Company has published World Oil for more than 90 years.