July 14 (Bloomberg) -- Oil and gas rig use in Latin America rose to a 22-year high in June, led by Brazil, Mexico and Venezuela, according to a report by Baker Hughes Inc.

Oil explorers in Latin America deployed 398 rigs last month, or about 36 percent of drilling equipment used globally excluding the U.S. and Canada, the highest since April 1986, Baker Hughes said on its Web site. The region's rig count rose 8.7 percent from a year earlier.

Producers are stepping up exploration as record oil prices make previously uneconomical fields worth drilling. Increased spending and high prices have kept deepwater rigs operating near capacity for two years and tripled rentals, according to Houston-based rig consultant ODS-Petrodata.

``There is a lot of offshore drilling in Brazil, Malaysia and China pushing up rig demand,'' said Tony Regan, a consultant with U.S. Nexant Ltd. in Singapore.

Mexico, the biggest user of rigs in the Asia-Pacific, deployed 112 rigs to drill on land and water, the report said. The number of offshore rigs used increased by 13 to 41 from a year earlier.

Oil producers in Venezuela increased the number of drilling rigs in use in June by two to 84, Baker Hughes said. Brazil, which had one of the biggest discoveries in the last two decades, increased the offshore rig count by five to 28.

The international rig count, excluding the U.S. and Canada, for June stood at 1,102 compared with 1,015 a year earlier, Baker Hughes said.

Baker Hughes has published the rotary rig counts since 1944, when Hughes Tool Co. began weekly counts of U.S. and Canadian drilling activity, the Web site said. The monthly international rig count started in 1975.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net.

Last Updated: July 14, 2008 05:10 EDT