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The deepwater and ultra-deepwater drilling market size is estimated to grow by USD 3,708.2 million at a CAGR of 4.97% between 2022 and 2027. The growth of the market depends on several factors, including the increasing demand for oil and gas, the depletion of onshore reserves, and advancements in technology.
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
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The increasing demand for oil and gas is notably driving the market growth, although factors such as the high upfront investment and operational costs may impede the market growth.
One of the key factors driving the market is the increasing demand for oil and gas. Global population growth and economic development are increasing the consumer demand for oil and gas. Energy demand in developing countries like China and India is growing at an unprecedented rate. The increasing use of oil and gas in production, power generation, and transportation further contributes to this demand.
Providing access to previously untapped reserves, the markets are well-positioned to meet this growing oil and gas demand. The Gulf of Mexico, a key geographic region for deep-sea drilling, now produces 20% of all US crude oil demonstrating the importance of deep-sea drilling in meeting global energy needs. Due to these factors, the target market is expected to witness significant growth during the forecast period.
The growing adoption of digital technologies is one of the key trends that is expected to impact the industry positively during the forecast period. The global deep and ultra-deepwater drilling market is seeing an increase in the use of digital technologies such as machine learning and artificial intelligence as companies use these tools to increase efficiency. For instance, ExxonMobil announced a partnership with Microsoft in 2021 to use cloud-based technologies such as artificial intelligence (AI) and machine learning to optimize reservoir performance and reduce drilling costs.
Similarly, BP has worked with technology companies to create predictive analytics tools that can predict equipment failures and reduce downtime. The use of digital technologies enables companies to monitor and evaluate massive amounts of data in real time, spot potential problems beforehand, and make smart decisions to optimize drilling operations. All these factors are expected to drive the growth of the global market during the forecast period.
One of the key challenges to market growth is the high upfront investment and operational costs. The global deep-water and ultra-deepwater drilling market is facing significant challenges due to high initial investment and operating costs. Deepwater drilling requires specialized infrastructure, including rigs, underwater piping, and wellhead systems, which can cost billions of dollars to develop and maintain. For example, ExxonMobil has announced a USD 10 billion investment in the development of the Payara field off the coast of Guyana by 2021. The field will require deep-water drilling operations at depths of more than 1,500 meters.
Similarly, Chevron's Anchor deepwater exploration project in the Gulf of Mexico requires an initial investment of USD 5.7 billion. Small businesses are expected to find it difficult to enter the market and compete with older players due to such high upfront costs. In addition, high initial costs can threaten profitability in the event of a sudden drop in oil prices or an increase in operating costs, making it difficult to recover. Therefore, during the forecast period, these factors are expected to limit the growth of the market under consideration.
The market research and growth report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Aban Offshore Ltd.: The company offers deepwater and ultra-deepwater drilling solutions such as ABAN III jack-up self-elevating drilling unit 3 independent leg cantilever.
The market forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market Companies, including:
Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.
The market share growth by the deepwater drilling segment will be significant during the forecast period. Harsh drilling environments are becoming more common due to the growing demand for oil and gas and the depletion of traditional reserves. According to Brazilian oil and gas company Petrobras, a major deep-water discovery has been made in the Campos Basin off the coast of Rio de Janeiro in 2021.
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The deepwater drilling segment was valued at USD 7,680.37 million in 2017 and continued to grow until 2021. Deep-sea drilling remains critical to meeting global energy demand. Deepwater drilling projects are funded by a number of companies, such as Chevron and Shell, which reflects a promising market outlook for this application in the global market during the forecast period.
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North America is estimated to contribute 30% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in North America is expected to grow rapidly during the forecast period. North America is considered a major region in the oil and gas industry.
With the gradual rise in crude oil prices, the region has resumed deep and ultra-deep oil and gas projects in the Gulf of Mexico (GOM). The resumption of these projects is estimated to boost the offshore drilling market in the region during the forecast period. Natural Resources Canada Ltd. began drilling a new offshore oil well in the Flemish Pass basin off Newfoundland and Labrador in 2021. Up to 75,000 barrels of oil can be produced from the well per day. The increased adoption of offshore drilling due to its untapped exploration potential has increased investment in offshore drilling projects.
The market is buoyed by growing population demands and the pursuit of untapped resources. Technological advancements drive exploration and production (E&P) operations, supported by government initiatives for energy security. Foreign investment and favorable business policies enhance vendor growth potential in major markets like the United States and Angola. Offshore pressure control technology ensures safe operations in remote locations, despite fixed costs. Cost reductions, along with technological breakthroughs, optimize per-barrel operating costs, boosting production volumes. Oil and gas exploration and production companies lead sustainable deepwater developments, aligning with major market trends towards efficient and environmentally conscious practices in offshore deepwater oil projects.
The market growth analysis report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Market Scope |
|
Market Report Coverage |
Details |
Page number |
154 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.97% |
Market growth 2023-2027 |
USD 3,708.2 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.54 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 30% |
Key countries |
US, Mexico, Saudi Arabia, China, and Norway |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aban Offshore Ltd., Baker Hughes Co., Chevron Corp., Diamond Offshore Drilling Inc., Dolphin Drilling AS, Eni SpA, Halliburton Co., Nabors Industries Ltd., Noble Corp. Plc, Oceaneering International Inc., Schlumberger Ltd., Seadrill Ltd., Transocean Ltd., Valaris Ltd., and Aker Solutions ASA |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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