E. MCCLARENCE 2010-06-28

Oil & Gas Industry

Fig. 1. Oil pot from www.freeimages.co.uk
Round up
Despite whatever trials and
tribulations BP may be going
through, demand for oil continues
its relentless rise. According to
Baker Hughes, which a range of
services to the worldwide oil and
gas industry, drilling activities
remain encouraging. The
international rig count for May
2010 was 1,090, up 16 from the
1,074 counted in April 2010, and
up 97 from the 993 counted in
May 2009. The international
offshore rig count for May 2010
was 298, down 10 from the 308
counted in April 2010 and up 27
from the 271 counted in May
2009.

The US rig count for May 2010

was 1,513, up 34 from the 1,479
counted in April 2010 and up 595
from the 918 counted in May
2009. The Canadian rig count for
May 2010 was 147, up 24 from
the 123 counted in April 2010 and
up 75 from the 72 counted in May
2009.
The worldwide rig count for May
2010 was 2,750, up 74 from the
2,676 counted in April 2010 and
up 767 from the 1,983 counted in
May 2009.
The Baker Hughes Rotary
Rig Counts are counts of
the number of drilling rigs
actively exploring for or
developing oil or natural
gas in the United States,
Canada and international
markets. Baker Hughes
has issued the rotary rig
counts as a service to the
petroleum industry since
1944, when Hughes Tool
Company began weekly
counts of US and Canadian
drilling activity.
Platt’s record increase
in China oil demand
China's apparent oil
demand continued its 2010
climb at a steady clip from
a year ago to reach 36.48
million metric tons (mt)

or about 8.6 million barrels
per day (b/d) in May,
according to a Platts analysis
of official data just released.
This is 9.8% higher than the
corresponding month of
2009. The country's oil
demand in May, though
higher than the April figure
of 35.42 million metric tons,
averaged 8.62 million barrels
per day, lower than the
previous month's 8.65
million b/d average, which is
explained by May being a
longer month.
Chinese refiners boosted
their combined crude
throughput to a new record
high of 35.79 million metric
tons (8.46 million b/d) in
May, beating their previous
record of 34.41 million
metric tons set in April and
more than offsetting a
decline in net refined product
imports, customs statistics
showed.
Compared with a year ago,
crude processed in May was
14.74% higher. Increased
indigenous production helped

 

E. MCCLARENCE 2010-06-28

China squeeze its net refined into an agreement to acquire stated goal of moving the fleet
  product imports to just 690,000 Frontier Drilling in a cash toward technology.
metric tons in May from more transaction which values the
than one million metric tons in enterprise at $2.16 billion. Plus Noble also had a number of
April and two million metric tons the company had announced agreements with Shell including
a year ago. agreements with Shell. Noble is a 10-year contracts for two
a leading offshore drilling ultra-deepwater drillships (one
"The on-year increase in contractor for the oil and gas Globetrotter-class currently
monthly Chinese oil demand has industry. Noble through its under construction and one
been progressively easing since subsidiaries carries contract additional newbuild) and multi-
January's 17.6% growth, and drilling services with a fleet of year extension on the
shrank to a single digit for the 62 offshore drilling units deepwater semisubmersible
first time in May, according to (including two rigs currently Noble Jim Thompson, each
Platts records," said Vandana under construction) located subject to Frontier closing.
Hari, Asia editorial director at worldwide, including in the Other Shell agreements add
Platts. "But the growth rates Middle East, India, the U.S. Gulf additional estimated $4.0 billion
looked higher at the start of of Mexico, Mexico, the in contract backlog over more
2010 because of a low Mediterranean, the North Sea, than 25 rig years
comparison base at the Brazil, and West Africa.
beginning of 2009, when Finally there is a resolution of
Chinese oil consumption briefly Frontier is an independent status of units operating for
felt the effects of the global drilling company with three Shell in the U.S. Gulf of Mexico
economic crisis." "If you look at dynamically positioned drillships during the current period of
absolute figures, the 36.48 (including two Bully-class joint imposed restriction allowing
million metric tons of apparent venture-owned rigs under Shell to suspend contracts
demand in May is the highest construction), two during this period, if necessary,
the country has ever recorded." conventionally moored drillships in exchange for a reduced
including one which is Arctic- suspension rate and operations
"However, resurgent debt woes class, a conventionally moored support with resumption
in Europe, China's largest deepwater semisubmersible contracts at original dayrates
trading partner, could temper drilling rig, and one dynamically and without reducing contract
Chinese oil demand growth in positioned floating production, term.
the coming months if it storage, offloading (FPSO)
dampens exports, which leapt vessel. As a result of the "Frontier is an excellent
by a strong 49% in May versus transaction, which is expected strategic addition to Noble's
a year ago," Hari added. to close by the end of July 2010 existing asset, customer and
and is subject to customary employee base," said David W.
China's oil demand growth this closing conditions, Noble will Williams, Chairman, President
year has received a major boost acquire a fleet that is currently and Chief Executive Officer of
from consumption of naphtha, supported by approximately 23 Noble. "This acquisition is a
feedstock for the country's rig years of contracts generating highly complementary extension
growing petrochemicals approximately $3.2 billion in of our mid- and deepwater
capacity, but also the product gross contract backlog ($2.0 presence and positions us for
most susceptible to a decline in billion net to Noble). additional growth in new market
overseas demand for Chinese segments that can provide
goods. Meanwhile, China's Noble's acquisition of Frontier further opportunities for Noble
apparent oil demand in the first and its agreements with Shell and our customers. Noble's
five months of 2010 totaled significantly enhance Noble's historical hallmark of a strong
174.07 million metric tons, stature as a major deepwater safety culture and our
compared with 153.07 million service provider and cements its reputation for operational
metric tons in the corresponding position as the world's second excellence should benefit
period of 2009 says Platts. largest offshore drilling Frontier's existing customers
contractor. The addition of the and drive value for our
Industry acquisition Frontier fleet along with two shareholders."
  newly constructed drillships of
Noble Corporation has entered   its own supports the company’s