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According to Technavio analysts, the downhole tools market share is estimated to increase by USD 11.38 billion by 2026, and the market's growth momentum will accelerate at a CAGR of 5.5%.
This downhole tools market research report extensively covers market segmentation by the following:
The downhole tools market vendors compiled and studied in this report include Aker Solutions ASA, AKITA Drilling Ltd., American Oilfield Tools Inc., Archer Ltd., Baker Hughes Co., Dril Quip Inc., General Electric Co., Halliburton Co., Hunting Plc, Innovex, NexTier Oilfield Solutions Inc., Nine Energy Service Inc., NOV Inc., Schlumberger Ltd., Schoeller Bleckmann Oilfield Equipment AG, Superior Energy Services Inc., Tasman Oil Tools Ltd., The Weir Group Plc, Tryton Tool Services, and Weatherford International Plc among others.
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Based on our research output, there has been a negative impact on the market growth during and post COVID-19 era. The rise in unconventional oil and gas resources is notably driving the downhole tools market growth, although factors such as volatility in crude oil prices may impede market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the downhole tools industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Downhole Tools Market Driver
One of the key factors driving the global downhole tools market growth is the rise in unconventional oil and gas resources such as shale gas, coalbed methane, and tight oil. With technological innovations and operational efficiencies, the cost incurred in the extraction process has been reduced, which has resulted in the flourishing of unconventional resource exploitation. Investments are being made in unconventional sources, especially in North American countries such as the US. In addition, the increased supply from the shale formation was one of the major reasons for the declining prices of crude oil. The expansion of the oil and gas industry in Canada resulted in the high economic growth of the country. Canada has huge reserves of oil sands, with Alberta having the third-largest proven crude oil reserve in the world. Thus, the rise in unconventional oil and gas resources will increase the demand for downhole tools in the forecast years.
Key Downhole Tools Market Trend
New-generation automated drilling rigs is one of the key downhole tools market trends that is expected to impact the industry positively in the forecast period. Digital technology has become an important tool, as it drives profit margins and reduces the downtime and idle time for the equipment. Digitalization will help in recording huge amounts of data, which can be later compared with the information collected from other fields and rigs, along with analyzing the historical data that will assist in making effective decisions. For instance, Schlumberger and Nabors Industries offer new rig concepts. The technology will digitally integrate the drilling process, including the bottom-hole assembly and drilling bit, and other downhole tools, to the surface equipment with the help of software, which will aid in automating the mechanical processes of geo-steering. Such factors will further support the market growth in the coming years.
Key Downhole Tools Market Challenge
One of the key challenges to the global downhole tools market growth is the volatility in crude oil prices. For instance, a steep decline in the price of crude oil has been observed from over USD 100/bbl in 2014 to below USD 35/bbl by May 2020. Volatility in oil and gas prices affects investment decisions in new and existing projects, leading to project abandonment, delays, and reduction in investment outlays. In addition, the downward movement in oil and gas market prices has a direct impact on storage service customers, pressurizing the entire value chain. Such volatility in commodity prices severely impacts the market for exploration and drilling companies as the number of new projects reduces owing to the lack of investments, mainly in the deep and ultra-deepwater, which will reduce the demand for downhole tools in the coming years.
This downhole tools market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global downhole tools market as a part of the global oil and gas drilling market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the downhole tools market during the forecast period.
The report analyzes the market's competitive landscape and offers information on several market vendors, including:
This statistical study of the downhole tools market encompasses successful business strategies deployed by the key vendors. The downhole tools market is fragmented and the vendors are deploying organic and inorganic growth strategies to compete in the market.
To make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The downhole tools market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the downhole tools market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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46% of the market's growth will originate from North America during the forecast period. The US is the key market for downhole tools in North America. Market growth in this region will be faster than the growth of the market in South America and Europe.
The rise in the number of drilling activities owing to an increase in the number of rig counts will facilitate the downhole tools market growth in North America over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
The unexpected COVID-19 pandemic severely affected the regional economy. Owing to the first nationwide mandatory closure of non-essential businesses imposed by countries in the region, such as the US, manufacturing units were closed, and the manufacturers faced the challenge of survival. However, in 2021, lockdown restrictions were relaxed, and the oilfields and refineries reopened due to the COVID-19 vaccination drives. This will contribute to the growth of the downhole tools market in the region, which would lead to the gradual recovery of the market in focus in North America.
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The downhole tools market share growth by the drilling segment will be significant during the forecast period. The increase in crude oil extraction owing to the growing popularity of hydraulic fracturing and horizontal drilling techniques is expected to drive the demand for drilling and thereby lead to the growth of the global downhole tools market in the coming years.
This report provides an accurate prediction of the contribution of all the segments to the growth of the downhole tools market size and actionable market insights on post COVID-19 impact on each segment.
Downhole Drilling Tools market - The market share is expected to increase by USD 7.56 billion from 2020 to 2025, and the market's growth momentum will accelerate at a CAGR of 4.73%.
Downhole Tools Market Scope |
|
Report Coverage |
Details |
Page number |
120 |
Base year |
2021 |
Forecast period |
2022-2026 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.5% |
Market growth 2022-2026 |
$ 11.38 billion |
Market structure |
Fragmented |
YoY growth (%) |
4.47 |
Regional analysis |
North America, Middle East and Africa, Europe, APAC, and South America |
Performing market contribution |
North America at 46% |
Key consumer countries |
US, Saudi Arabia, China, Russia, and Brazil |
Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
Key companies profiled |
Aker Solutions ASA, AKITA Drilling Ltd., American Oilfield Tools Inc., Archer Ltd., Baker Hughes Co., Dril Quip Inc., General Electric Co., Halliburton Co., Hunting Plc, Innovex, NexTier Oilfield Solutions Inc., Nine Energy Service Inc., NOV Inc., Schlumberger Ltd., Schoeller Bleckmann Oilfield Equipment AG, Superior Energy Services Inc., Tasman Oil Tools Ltd., The Weir Group Plc, Tryton Tool Services, and Weatherford International Plc |
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, Market condition analysis for 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. |
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