Sunday, February 28, 2021

Rig Counts In Saudi Arabia -- February 28, 2021

A reader alerted me to this. I will post it now without comment, might come back to it later:

Link here.


At the time the kingdom cut the number of rigs, back in the October time-frame, Saudi suggested it was maintaining constraints on oil production.

So, now we see that dramatic increase, month-over-month.

Let's assume Saudi is telling the truth, that the kingdom will hold the line and not increase production. What does the graph tell you? OMG! The Saudi oil fields have a decline rate greater than Bakken shale! LOL. They need to increase the rig count by 20% to maintain production.

Let's assume Saudi is lying. The graph ... this is not rocket science.


  1. I think they need ~55 rigs to hold production at about 12 MM bopd. They are running a bit lower now because they are holding some production back artificially (just shorting the market). And also, since they are really maintaining a lower number than 12 now. (9 or so, I think.)

    But you can't judge too much for either the Bakken or SA, based on short stretches of time. Need to wait for a year or two with constant rigs to see what production settles out at. Or constant production and what rigs settles out at, to maintain it. But if you analyze the wiggles too much, you'll get lost. There's too much delay.

    I think the Bakken needs about 40 for 1.2 MM bopd (sustained, long term, constant DUCs). So that's about 30 rigs per million bopd. SA is more like 5 rigs per million. It's just a much richer oil province. Average well IPs at several thousand bopd (AVERAGE, not cherrypicked, highlighted, superstars). And they have lower decline also. And really a fair amount of "baseload" (old wells with steady production). You do get some wells that water out and have to be shut down. So it's not all roses. But really, it's a more target rich environment. Like Miramar officer's club after Top Gun movie came out. Not like SUBASE on Point Loma. ;-)

    1. What amazes me is what the decline rate in Saudi Arabia must be. Something no one talks about because it’s so cheap to drill there.

    2. I'v been watching the rig counts for months. I kinda wondered how much impact the reduced rig count has affected peak production. The famous Ghawar field is not what it used to be, many rigs were drilling deeper wells in Saudi Arabia. And if worldwide stock markets dive, so will Saudi money will dive.

    3. Agree. I never thought of following Saudi rigs. Great catch. Thank you. I don't think folks realize -- certainly I did not -- how much the world really lives on the edge when it comes to oil.