According to one of the latest industry assessments by Rystad Energy, an independent energy research and business intelligence company, the COVID-19 pandemic is poised to unleash significant damage on global drilling, both in terms of wells drilled and related demand for drilling equipment. In relation to the former, the Rystad Energy’s analysis shows the number of drilled wells globally is expected to reach around 55,350 this year, the lowest since at least the beginning of the century.
The decline is a staggering 23% fall from 2019’s number of 71,946 wells. Rystad’s forecast, which extends to 2025, does not find it likely that last year’s number will be met or exceeded within the considered time frame. From the 55,350 wells to be drilled in 2020, 2,238 are offshore and 53,112 onshore. Before Covid-19 struck, Rystad Energy had expected total wells to rise year-over-year to 74,575, of which 2,896 would be offshore wells and 71,679 onshore wells.
Guyana Standard understands that drilled wells are expected to partly recover to just above 61,000 in 2021, as governments ease travel restrictions, boosting oil demand and prices. Numbers will rise further to just above 65,000 in 2022 and remain just below 69,000 until the end of 2025.
The Norwegian company was keen to note that North America is likely to be most affected, with the country’s rig count already down to historic lows just a few months into the downturn. Although modest recovery is possible in the second half of 2020, Rystad shared that drilling activity will remain more than 50% below the levels seen at the same time last year.
Despite the overall stagnant growth, Rystad said that Brazil, Australia and China will continue to offer exciting opportunities in the short term with 20% to 40% growth prospects for offshore drilling in these countries while the United Kingdom, Guyana and Mexico look promising in the medium to long term. The research company noted that the United States remains the hotspot for spending on drilling tools onshore, while Norway is expected to top the list for offshore drilling tools spending.