Africa and the Middle East are the only two regions that have witnessed rise in rig counts for exploration and production (E&P) last month, oil and gas services company Baker Hughes has announced
The company said in its report for June 2015 that the number of rigs deployed in the Middle East increased by two to 401, while Africa added three rigs to 103. All other regions of the world have posted declines, it added.
News agency UPI has reported that rig counts provide an indication of the health of the energy sector focused on exploration and production, a sector struggling in an era of lower crude oil prices.
Energy companies during latter half of 2014 and first half of 2015 announced cuts in spending targeting E&P. In Latin America, Baker Hughes found rig deployments were down about four per cent from May to 314, while Asia-Pacific rig numbers dropped about one per cent to 215.
In the USA, where shale oil production pushed the global market heavily toward the supply side, rig deployments fell more than three per cent to 861. For onshore work, activity in the exploration and production sector dropped about 2.8 per cent, while offshore deployments were down 12.5 per cent.
Most of the gains in total USA oil production came from inland shale basins. In a short-term market report, the US Energy Information Administration (EIA) said total crude oil production in the country declined 50,000 bpd in May and the trend is likely to continue through early 2016.
EIA administrator Adam Sieminski said that, despite the decline, the expected 2015 average of 9.5mn bpd is the highest production level in 45 years.
“The forecast decline in USA’s monthly oil production through early 2016 is the result of low oil prices, which pushed oil companies to reduce their investment in drilling that resulted in the lowest number of rigs drilling for oil in nearly five years,” he noted.
The Organization of Petroleum Exporting Countries (OPEC) has already said that it was keeping its production levels static in an effort to shore up its market share during the shale era.