3.5 million barrels of oil were exported from Canada to the US every day in 2018. This made up 96% of the aggregate crude oil exports from Canada! This also made Canada the fourth-largest producer and exporter of oil in the global market!
The upward trend in Canada’s oil exports has expanded the market, inviting new drilling businesses into the playing field. Since oil production is expected to play a critical role in the global energy mix in the times to come, oil extraction and production will remain at a record-high until 2050.
This is why new businesses are on the lookout for reliable oilfield instrumentation and drilling equipment. If you’re considering a used drilling rig, make sure the parts, including mud pressure gauges and weight indicator systems, are operational. There’s a lot more that you need to keep in mind while making such a massive capital investment.
Upgrade Your Equipment
The oil and gas industry is accelerating at a breakneck pace, and businesses need to take the new challenges in a stride. Oil and gas companies have to keep up with the changing landscape and focus on adopting more efficient ways of running their drilling projects.
The aim is to design, structure, and operate oilfield instrumentation to reduce greenhouse emissions and support environmental sustainability. In a bid to achieve that, companies are investing in the latest technology and super-efficient drilling machinery.
Shifting focus from coal mining to natural gas extraction will also reduce the intensity of fossil fuel use. The business portfolio of oil and gas majors focus on reducing the carbon footprint on the planet. This is why the equipment you select should boost productivity and cut costs.
Cost Comparison
This is an important consideration for an oil rig company. If you’re drawn toward a used oil rig because it’ll help you reduce cost, you’re mistaken. New or old, oil rigs are a significant capital investment for an oil company. A new oil rig may cost more—ranging from $20 million to $1 billion—but a used one may require serious repairs that’ll bring the cost to relatively the same level. A new oil rig is a ticket to get in the business right away and start drilling, without spending any more time or money.
Land vs. Offshore Rigs
Oilfield instrumentation represents the major capital expenditure for an oil-producing company. Land drilling incurs an additional cost of building infrastructure and providing utilities such as water and electricity. This can pile up more expenses on top of the cost of the drilling rig. In the US, the cost of land drilling can reach up to $25 million. The most inexpensive options available are known as small footprint land rigs.
In contrast to land drilling, offshore drilling can cost up to 20 times more than land drilling. The drilling equipment required for offshore rigs will amount to 90% of the total investment. The least expensive cost estimate for offshore drilling is estimated to be $200 million. But on average, the cost can go up to $650 million.
There were 146 active drilling rigs in Canada in 2019. About 5 percent of oil production and 1 percent of gas production is extracted from offshore rigs in Newfound and Labrador. So despite the cost, eager oil riggers are deterred by the economic prospects of drilling offshore or on land. But making the right business decisions is imperative to guarantee their survival in the competitive oil and gas industry.
We can guide you toward making the right decision regarding oilfield instrumentation, such as custom cables, clipper weight indicators, or mud pressure gauges.
Contact Instruments is the only manufacturer of OEM drilling instrumentation in Canada with its production facility in Leduc, Alberta. They’re a leading provider of drilling equipment, including oil rigs, for Canadian and American oil producers. Check out our products or call us at 780-955-8998 for more information.