A View to a drill

Offshore drilling and deepwater development will continue to boom in 2012.

Executives at top regional drillers take the measure of the Middle East’s drilling market for 2012 and beyond.

Where the oil price leads, so oilfield services companies – and drillers in particular – follow. As dated Brent averaged $111 a barrel through 2011, and the Middle East’s regional gas demand continued to grow, drillers saw healthy demand for their services across several markets.

Schlumberger has posted forecast-beating fourth quarter revenues of $10.97 billion versus $10.23 billion in the third quarter of 2011, and $9.07 billion in the fourth quarter of 2010. The company also reported full-year 2011 revenue of $39.54 billion versus $27.45 billion in 2010.

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Halliburton had a spectacular 2011, posting revenues of $24.8 billion, a 38% increase over 2010. The world’s second-largest oilfield services company, now headquartered in Dubai, has staked out a leading position in unconventional oil and gas recovery from the explosion of shale activity in North America.

In the Middle East, Halliburton along with fellow oilfield services giants, is now benefitting from increased upstream activity in Iraq as ambitious field development programs get underway in earnest.

Political turmoil in 2011 did dampen some drilling markets. “The Middle East has seen a slight decline in drilling and drilling-related activities in 2011,” says Wesam Al-Heureithi, General manager of Al Shaeen Weatherford, the joint venture between the oilfield services company and Qatar Petroleum.

“This can be attributed to the fallout of the global financial crisis and the instabilities in some of the countries due to the Arab Spring uprisings.”

However, while production took a hit, and rig and equipment movements to and from those markets were disrupted, core Middle East producers require further drilling to meet domestic demand and improve yields from current fields. The GCC drilling market in particular is in rude health.

Kuwait-based Gulf Investment House predicts the UAE will alone spend $98 billion on oil and gas projects.

As part of its heavy crude development plan, Kuwait Oil Company has powered ahead with intensive drilling in the North. From an initial plan to drill 200 wells, KOC has drilled a total of 537 well in the area, with 258 completed in 2011 alone, according to the KOC’s Hosnia Hashim in an interview with Oil & Gas Middle East (page 25).

“Several areas within the Middle East have encountered increased activities and focus for drilling and drilling related services; Saudi Arabia, Iraq and Oman, says Guy Tennant, vice president for Middle East business development at Halliburton.

“These increases can directly be related to emerging markets such as Iraq, unconventional gas exploration and development projects in Oman, and Saudi enhanced offshore and land oil development projects.”