2011: A Pivotal Year for the Global Drilling Industry
2011 was a defining year for the global drilling and oil & gas industry, characterized by expanding activity, major discoveries, strong M&A momentum, and the continuing impact of one of history’s worst drilling disasters.
1Industry Recovery & Exploration Spending
Key Trend: As the industry moved beyond the recessionary impact of 2008-2010, exploration and drilling activity remained robust in 2011. Many operators maintained or increased capital commitments, with exploration budgets projected to grow and spending levels set to reach record range compared with previous years.
- Sustained high oil prices throughout 2011
- Need to replace depleting reserves
- Growing confidence in economic recovery
- Deepening demand for drilling tools and services
- Increased rig utilization rates
- Strengthened pricing power for service companies
2Deepwater and Offshore Drilling Environment
Although the U.S. drilling moratorium from 2010 technically ended in late 2010, permitting and approvals in early 2011 remained sluggish — especially for deepwater projects. Operators faced a reduced pace of new deepwater drilling permits, which stayed far below historic averages in 2011 due to lingering regulatory caution and safety reviews.
- Permitting pace remained below historic averages
- Increased safety requirements and reviews
- Ongoing caution from regulatory agencies
- Slowed deepwater project pipelines
- Reallocation of resources to onshore projects
- Increased focus on international offshore opportunities
3High-Value Discoveries Around the World
A series of significant oil and gas discoveries in 2011 helped reinforce drilling demand and exploration optimism across multiple regions, demonstrating the ongoing potential for major finds despite industry challenges.
Repsol YPF reported one of the largest shale discoveries in Argentine history, with potential for long-term unconventional production growth.
Joint ventures led by Apache confirmed major gas pay in the WA-290-P permit region, expanding Australia’s offshore gas potential.
Total EP Norge announced a significant gas find offshore the Barents Sea, drilled by Seadrill’s West Phoenix rig.
ExxonMobil’s Keathley Canyon wells (KC918/919) revealed substantial oil accumulations, underscoring lingering offshore potential despite regulatory constraints.
4Rig Count Growth Across Global Markets
Key Statistic: By August–September 2011, the worldwide rig count climbed to over 3,600 active units, up significantly from 2010 levels and reflecting expanding drilling programs worldwide.
5Shale Plays and Horizontal Drilling Momentum
Texas’ Eagle Ford Shale gained prominence for its rich oil and liquids content, driving greater drilling activity and investment throughout 2011.
- Oil rigs gradually became dominant
- Horizontal rig counts reached historic highs
- Technological advancements drove efficiency gains
6M&A and Deal Activity Highlights
M&A Activity Reached Historic Levels in 2011
Reflecting strategic focus on resource scale and shale asset consolidation
These transactions highlighted sustained investor confidence in resource potential, particularly in shale-rich basins, and reflected energy companies’ strategic focus on resource scale, shale asset consolidation, and capital deployment.
7Legal and Industry Impact of Deepwater Horizon
The legal fallout from the Deepwater Horizon rig explosion continued into 2011, with litigation and settlement proceedings involving BP. These cases involved major industry players and influenced industry discussions on safety, liability, and offshore operations.
- Ongoing litigation and settlement processes
- Significant financial implications for involved companies
- Establishment of multi-year legal frameworks
- Heightened emphasis on safety measures
- Regulatory frameworks shaped for offshore operations
- Influence on risk assessment and liability considerations
🔮 2011: A Year of Transformation for Global Drilling
2011 was a pivotal year of transition for the global drilling industry. The industry navigated the aftermath of the Deepwater Horizon incident while experiencing robust onshore activity, major new discoveries, and unprecedented M&A activity.
The year established foundational trends that would shape the industry for the next decade: the rise of shale and unconventional resources, increased emphasis on safety and regulation, and asset consolidation through strategic M&A.