A record number of rigs are drilling for oil and gas on the Arabian peninsula even as drilling in the rest of the world tumbles in response to low prices, writes John Kemp, a columnist for Reuters.

There were almost 290 rigs active in Saudi Arabia and neighbouring Kuwait, the UAE and Oman in March, according to oilfield services company Baker Hughes.

The rig count has increased by 50 since oil prices started to fall in mid-2014 and has almost doubled over the last five years.
 
As a result, the Arabian peninsula now accounts for nearly 30 percent of all active rigs outside North America, up from less than 18 percent when the slump began.

Saudi Arabia alone had 127 operating rigs in March, with 67 targeting primarily oil-bearing formations and 60 hunting for gas.

Some analysts suggest the drilling uptick is part of Saudi Arabia's strategy of defending or even increasing its oil market share.

There have even been suggestions the kingdom is reviving its previously abandoned plan to raise capacity from 12.5 million to 15.0 million barrels per day. But it is at least as likely the increase in drilling is driven by the need to replace declining output from mature fields and the need to develop new sources of gas for power generation.  -Reuters