NORWALK, Connecticut -- An IHS Herold Special Update on the Oil Field Services Sector issued this month indicates the Gulf of Mexico drilling moratorium constrained what would have been an otherwise strong recovery for the sector in 2010, but the disappointing financial performance for the sector last year is expected to reverse and lead to a rebound in activity in late 2011 or early 2012, as drilling budgets and offshore drilling demand rise worldwide. An exception, however, is the Gulf of Mexico, where lower activity levels will continue to limit earnings for the sector.
The report updates a preliminary version released this past December, and compares key oil company financial performance for the entire 2010 against that for 2009 including multi-service companies. The report says that while the multi-service companies were hit hard by the moratorium, the offshore drilling category took an even harder financial beating in 2010.
The report notes that any increases in drilling budgets for deepwater operations aer coming in Brazil and Africa, and that this could soak up some of the excess rig supply. Going forward beyone 2011, the report anticiaptes more demand for newer, more technologically advanced rigs.
In contrast to the offshore segment, North American oil and gas shales, and other tight production plays, will continue to be a prime driver of activity through 2011.
CERAWeek: GoM drilling moratorium constrained oilfield services recovery