With the main market driver for rig companies being drilling activity, an understanding of future drilling demand is essential for proper portfolio management. Rystad Energy was approached by a rig company with the question being whether a certain offshore region would be over- or under-supplied in terms of rig services during the next five years. The client was considering upgrades and/or additions to the current fleet.


By monitoring and interviewing oil companies, the Rystad Energy team aggregated future drilling plans within exploration, development and production drilling. The approach provided a meaningful forecast with a few years horizon as oil companies do not tend to disclose long-term plans. However, to complete the picture, the Rystad Energy team modeled future long-term activities within the same segments basing outlooks on assumptions such as oil price, future acreage awards and future exploration success. A look-back analysis was made along central dimensions to qualify all assumptions. To visualize sensitivities, the team created scenarios on both sides of the established base-case by challenging central assumptions.


A fundamental, field-by-field, license-by-license, well-by-well drilling demand forecast was established and compared to the apparent new and existing supply of rig services within the region of interest. The client was able to carry a robust forecast of the future gap between supply and demand for rigs into its portfolio optimization process. The client was provided with a fundamental understanding of the market, customers and rig future rig requirements, all of which was used to base its conclusion on future capital allocation.

Putting It All Together - Forecasting Future Rig Demand by Activity Including Supply