Fewest U.S. Oil Rigs Since ’40s
HOUSTON (AP) _ With oil prices at their lowest in more than a decade, domestic oil drilling and exploration has plunged to its lowest level in more than half a century.
The number of oil and gas rigs operating in the United States dropped to 588 this week _ the lowest count since a well-known industry watcher began keeping score in 1944.
The decline below the previous record low of 596 set in June 1992 was a new danger signal for an industry that has been walloped by a sharp decline in the price for crude. During the same week last year, 996 rigs were operating.
``When it’s as low as it is now, we’re a pretty anemic industry,″ said John Bell, owner of a small independent oil company in the West Texas town of Kermit. ``We’re about as unhealthy as we can get.″
Houston-based toolmaker Baker Hughes Inc. has kept track of the count since 1944. The tally peaked at 4,530 on Dec. 28, 1981, during the height of the oil boom.
Tony McAloon, director of market research at Baker Hughes, said there are probably fewer rigs looking for oil and gas in the country now than at any time since the heady oil boom town days of the early 1900s, when accurate counts were not available.
McAloon said he expects the U.S. oil industry to bottom out some time this year.
``To find oil in the United States is more expensive than to find it in various international markets, and so although international locations can survive with low oil prices, many U.S. producers cannot,″ he said.
In the United States, the second-largest oil producer after Saudi Arabia, the crisis has prompted companies to lay off workers, slash expenses and cut back or completely eliminate drilling projects.
In the Houston area alone, about 4,200 oil industry workers lost their jobs in 1998, including 2,500 positions in exploration and production, Texas Workforce Commission data shows.
``All of the service industries _ people selling pipe, mud, engineers, geologists _ all of these people are working when the rigs are running and they’re not when the rigs stop,″ said Morris Burns, executive vice president of the Permian Basin Petroleum Association.