Shortage of offshore oil rigs will continue until 2007

The association of the Indonesian oil and gas drilling companies APMI estimates that the shortage of offshore rigs which has caused a sharp increase in rental since early last year would likely continue until the end of 2007, Media Indonesia reported on Tuesday.

The association's chairman Bambang Purwohadi said in Jakarta on Monday that the demand for offshore rigs from the world's oil and gas companies was still high due to an increase in exploration activities on offshore oil and gas fields.

"The sharp increase in the demand and the rise in the oil prices have contributed to the sharp increase in the rental fees," he said, adding that the shortage of the rigs did not only occur in Indonesia but also in other oil and gas rich countries.

He said that oil exploration activities in many offshore oil fields in the world had been delayed because the lack of the rigs. "As the rig is mostly used for at least two years, the lack of rig supply has caused more difficulty for oil and gas companies to find rigs available for their drilling activities," Bambang said. (*)