Utilization of offshore drill rigs, other than shallow-water jack-ups, continues to push 100%. Not to put too much of a damper on the adminstration’s (and the Republican National Committee’s) mantra of opening offshore oil drilling as part of the “Drill, Baby, Drill” program, but what are they planning to drill with? When the red line maxes out at 100%, as it basically has for the past 3 years, that means that there aren’t any spare rigs available.
Oil output from the major oil companies is down 4.1% this quarter compared to the same quarter last year, and 7% below 2005. I would note that output has fallen even though there are now 20% to 25% more drill rigs in operation and capital expenditures for oil exploration and production has doubled since 2005. There is less oil, and it takes more effort and money to find and produce it than any other time in the last 80 years.
In related news, Norwegian brokerage Pareto Securities polled 22 oil companies regarding estimated future oil prices used for evaluating new projects. The average design price was $70/barrel. Five years ago it was $27/barrel.
Update: For another take on offshore drilling and why expanding US offshore drilling won’t do what the GOP says it will, see here.