The energy industry is one of the biggest sectors in the world and one which came under renewed spotlight last year - both in the U.S. and globally. This was due to the Russian invasion of Ukraine which upended global energy markets and caused prices to skyrocket, leading to inflation and high costs of doing business and living. At the same time, the Organization of Petroleum Exporting Countries (OPEC) also reduced oil output as it feared a crash in prices due to reduced global economic activity.
Fast forward to 2023 and there is still some uncertainty in the oil market. A report from the International Energy Agency (IEA) believes that oil demand will rise to a record high of 101.9 million barrels per day by the end of this year - climbing by two million barrels. Fueling this growth will be China, where economic reopening and return to normalcy is expected to contribute to 90% of the demand growth. Oil production as of March 2023 is below this upbeat demand trajectory, though, with OPEC and non-OPEC countries producing 44.17 million barrels per day. Almost one fourth of this output is from Saudi Arabia, with Russia being the second largest producer through its 9.58 million barrels of output. Crucially, Russian oil exports soared in March too, as oil shipments jumped to 8.1 million barrels per day to touch levels seen before the brutal Ukraine invasion. However, Russia is not earning as much from its exports as it previously did, with oil revenues dropping to $12.7 billion, or by 43% from the previous year.
At the same time, OPEC's latest supply cuts that were announced in April 2023 have created a new market for U.S. and non OPEC oil. According to the IEA, while global oil production growth is expected to drop by 1.2 million barrels per day this year, non-OPEC+ production, originating largely from the U.S. and Brazil is expected to grow by 1.9 million barrels. However, even as America boosts its oil production, it is unlikely that the output will soar back to cross levels seen before the coronavirus pandemic. According to the Energy Information Administration (EIA), U.S. oil production stood at 11.7 million barrels in 2022 and is expected to rise to 12.4 million barrels this year. However, while the government agency believes that this will "surpass the record high set in 2019" the chief executive officer of Pioneer Natural Resources Company (NYSE:PXD) Mr. Scott Sheffield believes that this will not surpass the 2019 record high of 13 million barrels in November of that year. Some reasons behind this, according to the CEO, are an under capacity in the oil refining market and a tendency for oil firms to be cash flow friendly. The executive also believes that it is possible for levels to cross 13 million barrels per day, but it's a slow process that can take years.
Building on this, almost half U.S. oil is produced in Texas, with New Mexico and North Dakota also accounting for large percentages. The largest U.S. oil production site is the Permian Basin, and America has also drilled for oil on the Pacific Coast, the Atlantic Coast, the Gulf of Mexico, and the Great Lakes. However currently, the Gulf of Mexico is the predominant player in U.S. offshore oil production, and according to the EIA, the region accounts for 15.3% of the total American oil output. Offshore drilling is done primarily through oil rigs, with several large firms such as Schlumberger Limited (NYSE:SLB) and Halliburton Company (NYSE:HAL) being not only the biggest offshore oil companies in America but also in the world.
In terms of monetary value, the global offshore oil production market is estimated to grow at a compounded annual growth rate (CAGR) of 8.7% between 2023 and 2030, or from $36 billion to $66 billion. Asia Pacific is by far the largest segment of the market, as the growing economies of India and China will boost the demand for locally available oil. This growth rate is also matched by the estimates for offshore oil rigs, as research from Straits Research points out that the offshore drilling rigs market will grow from $96 billion in 2021 to $176 billion by 2028 at a CAGR of 8.61%. Finally, the Gulf of Mexico oil and gas market should grow at a CAGR 4.5% through 2028 according to Mordor Intelligence. The latest bid for oil and gas leases in the Gulf took place in March 2023 when giants such as Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), and BP p.l.c. (NYSE:BP) participated in a $264 million bid for drilling rights.
Taking stock of the situation on the ground, the management of Schlumberger Limited (NYSE:SLB) shared updates during the firm's earnings conference for the fourth quarter of 2022 when they outlined:
Second, there is a greater sense of urgency around energy security. This is resulting in new investment in capacity expansion and diversity of supply. You will see this reflected in the number of new projects sanctioned, gas supply agreements signed and the return of offshore exploration, all at a pace unforeseen just 18 months ago. And third, the secular trends of digital and decarbonization are set to accelerate, driven by significant digital technology advancement in cloud and AI, favorable government policy support in New Energy investments and increased spending on low carbon initiatives by operator globally. Underpinning everything, commodity price remained at supportive levels for durable investment. In North America, spending growth is expected to be more restrained after an exceptionally strong year in 2022.
With these details in mind, let's take a look at some of the biggest offshore companies in the U.S., out of which the top picks are Halliburton Company (NYSE:HAL), Schlumberger Limited (NYSE:SLB), and Baker Hughes Company (NASDAQ:BKR).
16 Biggest Offshore Oil Rig Companies in the U.S.
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Our Methodology
To compile our list of the biggest offshore companies in America, we first listed all firms with offshore platforms in the world. Then, they were studied to determine if they have a presence in the U.S. The publicly listed offshore firms in the U.S. are listed through their market capitalization. The list starts by mentioning the private companies first. For more drilling companies, you can check out 15 Largest Drilling Companies in the World.
Biggest Offshore Oil Rig Companies in the U.S.
16. Blake International Rigs, LLC
Latest Market Capitalization: N/A
Blake International Rigs, LLC was set up in 1953 and it offers contract drilling services in the Gulf of Mexico. The firm has seven rigs, which can be loaded up on workboats and transported to the offshore platform.
15. Franklin Howard International Ltd
Latest Market Capitalization: N/A
Franklin Howard International Ltd. enables offshore drilling companies to build, maintain, install, and decommission their rigs and infrastructure. These include subsea decommissioning and well abandonment.
14. Coastal Drilling Company, LLC
Latest Market Capitalization: N/A
Coastal Drilling Company, LLC is based in Louisiana and it has barges and rigs for operation in the Gulf Coast region.
13. Parker Drilling Company (OTCMKTS:PKDC)
Latest Market Capitalization: $67 million
Parker Drilling Company (OTCMKTS:PKDC) operates oil and drill barge rigs for shallow water exploration. The firm is headquartered in Houston, Texas.
12. Petrofac Limited (LON:PFC.L)
Latest Market Capitalization: $409 million (1GBP = 1.25USD)
Petrofac Limited (LON:PFC.L) is a British company that provides engineering and support services to firms operating in the Gulf of Mexico. Its U.S. office is in Houston, Texas.
Nabors Industries Ltd. (NYSE:NBR) is based in Hamilton, Bermuda and it has close to 30 offshore drilling rigs.
By the end of last year's fourth quarter, 21 of the 943 hedge funds surveyed by Insider Monkey had bought Nabors Industries Ltd. (NYSE:NBR)'s shares. Israel Englander's Millennium Management is the largest investor with an $18.1 million stake.
Diamond Offshore Drilling, Inc. (NYSE:DO) has more than a dozen offshore rigs. The firm is based in Houston, Texas.
20 of the 943 hedge funds part of Insider Monkey's Q4 2022 survey had invested in the firm. Out of these, the largest shareholder is Stephen Mildenhalls's Contrarius Investment Management with a $93.4 million stake.
Fluor Corporation (NYSE:FLR) provides engineering, procurement, and construction services for offshore oil and gas production.
Insider Monkey took a look at 943 hedge funds for last year's fourth quarter and found out that 32 had invested in the firm. Fluor Corporation (NYSE:FLR)'s largest shareholder is David Rosen's Rubric Capital Management with a $114 million stake.
Transocean Ltd. (NYSE:RIG) is an offshore contract drilling services provider that is based in Switzerland.
As of 2022's fourth quarter, 41 of the 943 hedge funds part of Insider Monkey's database had held a stake in Transocean Ltd. (NYSE:RIG). D.E. Shaw's D E Shaw is the largest investor as it owns $159 million worth of shares.
Valaris Limited (NYSE:VAL) owns a diversified offshore drill rig portfolio and is headquartered in Hamilton, Bermuda.
48 of the 943 hedge funds part of Insider Monkey's Q4 2022 database had bought Valaris Limited (NYSE:VAL)'s shares. Out of these, the largest shareholder is William B. Gray's Orbis Investment Management since it owns 3.5 million shares worth $239 million.
Halliburton Company (NYSE:HAL), Valaris Limited (NYSE:VAL), Schlumberger Limited (NYSE:SLB) and Baker Hughes Company (NASDAQ:BKR) are some of the biggest offshore oil rig companies in the U.S.
