Monday, November 9, 2009

Explorers return to rigs to reap rising oil price and buoyant economy

THE number of rigs used by oil and gas explorers in Asia rose for the first time in seven months in October, according to data from the oilfield specialists Baker Hughes. The rise coincided with rising oil prices and signs of growth in global economies.

The Asia-Pacific region used 247 rigs on land and water last month, compared with 244 a year earlier, the first increase since March, Baker Hughes said. It compared with 246 rigs in September.

''Oil prices are strong, and gas prices as a result are higher in Asia,'' said Tony Regan, a consultant at Tri-Zen International in Singapore. ''Lots of activity in Asia is gas related - proving up reserves for liquefied natural gas.''

Crude oil prices in New York have gained about 75 per cent since the start of the year to $78.28 a barrel as investors expected the economy to recover and drive fuel demand.

The S&P 500 has soared 58 per cent from a 12-year low in March after $11.6 trillion in government spending, lending and guarantees returned the US economy to growth following a year of contraction.

Rig use peaked at 265 in June last year, a month before oil prices hit a record $147.27 a barrel. Last month the Asia-Pacific accounted for about 25 per cent of the 983 rigs used worldwide, excluding the US and Canada. The count was 1096 a year earlier, Baker Hughes said, and 986 in September.

There were 2271 rigs operating worldwide at the end of last month, 68 more than in September as the US added drilling equipment, Baker Hughes said. Rig use was 3518 a year earlier. The figure includes offshore and onshore drill sites, excluding those in Iran and onshore in China.

Baker Hughes has published rig counts since 1944. The monthly international count started in 1975.

This is an extract from http://www.theage.com.au/business/explorers-return-to-rigs-to-reap-rising-oil-price-and-buoyant-economy-20091109-i5fl.html

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