Global Drilling to Increase 14.2% in 2023
The Next Leg of a Globally Coordinated Multi-Year Investment Growth Cycle
Oil and gas operators worldwide report plans to increase the number of wells drilled in 2023 by 14.2% in response to growing demand and elevated oil prices. This reflects a slight downward revision from the 14.9% forecast in the summer of 2022.
Today’s findings are based on interviews with over 200 operators worldwide in Q4, 2022 and the downward revision is largely driven by US land.
Regional variances are observed with US land operators planning to drill 15.1% more wells in 2023 versus 2022 (down from the 17.3% forecast in the summer of 2022). Permian Basin remains strong with expectations to drill 15.2% more wells in 2023 versus 2022 and US non-Permian Basin regions are forecast to drill 14.7% more wells in 2023.
International land and offshore operators also report plans to increase the number of wells drilled in 2023 by 13.1% and 16.5% respectively rounding out the globally coordinated investment growth cycle.
2023 will be the 2nd year of investment growth that is expected to continue for the next several years due to increasing demand for oil & gas coupled with too many years of underinvestment from 2015 – 2021.
The supply of qualified oilfield equipment and personnel remains tight and major oil companies and national oil companies have focused efforts in the 2nd half of 2022 to secure long-term supply agreements to ensure access to resources to meet their operational needs and longer-term investment plans. In addition, the major and national oil companies are prioritizing technology/performance and quality service as key drivers in their selection of suppliers versus simply seeking the lowest price.
Oil and gas demand will continue to increase over the next twenty years and additional investment in the industry will be required to meet the global demand. Current policy and regulatory environment support higher oil prices while capital discipline among the operators and OFS suppliers will maintain a sustainable and profitable environment for investors.
Kimberlite will continue to track the future expenditure plans among the operators worldwide and report updates.
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