The South American offshore drilling market is expected to grow at an average annual growth rate [AAGR] of around 7.8%, from $12.04 billion in 2011 to approximately $16.74 billion in 2016.
Expenditure within the offshore drilling market in South and Central America increased over 2000-2008, from $4 billion in 2000 to $10.50 billion in 2008, due to substantial exploration activities off the coast of Brazil in the deepwater Santos and Campos basins. An energy demand drop occurred as a result of the global financial crisis of 2008, but a steady increase in expenditure has developed since then.
Looking towards Latin America, Brazil, Mexico and Venezuela continue to be the major hubs for offshore drilling in the region, although work offshore Trinidad & Tobago, the Falkland Islands and Suriname, and an upcoming drilling campaign in Guyana and Cuban waters will occupy a handful of units. Current offshore rig fleet utilisation in Mexico, Central, and South America combined is at 76.43%.
International oil companies are beginning to invest in exploration and drilling activity off the coast of Suriname, which lies close to the Caribbean. July 10, 2012 saw oil giant Chevron announce its entry into a joint venture with Bermuda-based Kosmos Energy Ltd. to aggressively explore for hydrocarbons, with each company holding a 50% stake in two Kosmos deepwater basins off the coast of Suriname.
Similarly, April 2012 saw the government of Trinidad and Tobago declare the commencement of deepwater block bidding for six offshore blocks off the East Coast Marine Area and Trinidad and Tobago Deep Atlantic Area. As a proactive measure to encourage offshore exploration, the government of Trinidad and Tobago cut back its petroleum profit tax from 50% to 35%, and has ensured state participation as means to encourage and support international E&P companies to drill in offshore Trinidad and Tobago.
Of the 31 offshore rigs in Mexican waters, 22 are under contract to state oil company Petroleos Mexicanos (PEMEX) for a fleet utilization rate of 70.97%. The Mexican rig market has declined significantly since last January, when 33 out of 36 rigs were under contract.
In South America, 97 out of 123 mobile offshore rigs are under contract for a fleet utilisation rate of 78.86%, up from around 76.3% a year ago. Brazil accounts for the vast majority of this activity, boasting a total of 67 rigs under contract to companies such as state giant Petrobras, domestic oil company OGX Petroleo, and international operators like Anadarko, Chevron, ExxonMobil and Repsol YPF. In Venezuela, PDVSA has 24 rigs, most of them Lake Maracaibo barges, either under contract or owner-operated, while one jackup is working in the country for Repsol YPF.
Based on currently known drilling plans put forth by operators, demand for semisubmersibles and drillships should rise in South America throughout the next year, due for the most part to work offshore Brazil.
For more information on the South American offshore drilling market, see the latest research: South American Offshore Drilling Market
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