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The drilling rig market size is forecast to increase by USD 14.6 billion, at a CAGR of 5.63% between 2023 and 2028. Numerous factors are pivotal in fueling market growth, such as a notable surge in the demand for oil and gas, amplified investments in the upstream oil and gas domain, and a transition towards unconventional exploration and production endeavors. These dynamics are paramount in driving market expansion. The increasing global reliance on oil and gas for various sectors, coupled with substantial investments directed towards enhancing extraction and production capabilities, underscores the significance of these factors. Additionally, the industry's inclination towards unconventional methods, including shale gas extraction and deepwater, reflects a strategic response to evolving market demands and technological advancements. As a result, these trends collectively contribute significantly to the market's upward trajectory, shaping its landscape and influencing investment strategies and operational priorities across the sector. It also includes an in-depth analysis of market trends and analysis, market growth analysis and challenges. Furthermore, the report includes historic market data from 2018 - 2022.
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The market encompasses the exploration and production of petroleum resources, particularly in untapped regions, where oil and gas discoveries continue to be made in challenging environments. These environments include shallow water, deep water, and ultra-deep water. Drilling rigs, such as jack up rigs, Semi submersible rigs, and drill ship, play a crucial role in accessing these resources. Operational companies are constantly innovating and investing in drilling technologies to mitigate environmental concerns and improve infrastructure efficiency. For instance, the Winterfell Project, a first-of-its-kind drilling operation, employs advanced technologies to extract natural gas from deepwater and ultra-deepwater reservoirs. As natural gas consumption continues to rise, the demand in the exploration and production of these resources is expected to grow. The market is dynamic, with ongoing advancements in drilling technologies and the discovery of new offshore discoveries in various regions. 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.
The increase in oil and gas demand is notably driving market growth. Countries such as China and India are witnessing rising industrialization and urbanization. As developing countries are urbanizing rapidly, they are also witnessing substantial growth in the demand for energy. This has significantly increased the demand globally.
Subsequently, oil and gas E&P companies are increasing their activities to boost the production of oil and gas to meet the increasing demand. Due to this, the global active rig count is increasing. Therefore, the rise in the global demand will fuel these activities. This, in turn, will drive the market growth and trends during the forecast period.
The rise in deep-water and ultra-deepwater E&P activities is an emerging market trend. Upstream oil and gas companies have been exploring deep-water and ultra-deepwater resources due to the presence of large untapped reserves. Also, the depletion of resources in easily accessible locations, such as onshore has led oil and gas E&P companies to look for less explored areas, such as deep-water and ultra-deepwater. These projects are becoming more financially viable because of the increase in global crude oil prices.
According to an estimate by the US EIA, global offshore deep-water oil production will increase by 2.7 mbpd between 2017 and 2040. Offshore oil and gas investments are expected to grow at a CAGR of 11.78% during 2018-2021. The rise in these activities in offshore deepwater and ultra-deep-water oil and gas wells will stimulate the demand during the forecast period, thereby driving the growth of the market in focus.
Fluctuations in global crude oil prices are a major challenge impeding market growth. Investment decisions and profits of upstream companies depend entirely on the prices of oil and gas. Hence, any fluctuations in the prices of oil and gas will adversely affect their revenues. Fluctuations in crude oil prices can also lead to the cancelation or rescheduling of oil and gas E&P projects.
During 2020, crude oil prices consistently declined due to a supply-demand imbalance. However, in 2021 prices were increased. Such instances influence the profitability and performance of oil and gas E&P companies. This results in slow growth or even a decline in E&P activities, including delays and cancellations of drilling projects. All these factors are hindering the growth of the market.
The market forecasting 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 research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market 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.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 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 encompasses various types of advanced equipment, including drillships and jack up rigs, employed in exploration activities for crude oil and natural gas in challenging environments. They utilize technologies such as artificial neural networks and machine learning to optimize drilling activities and improve operational efficiency. The market is driven by investment initiatives from energy companies to expand infrastructure in deepwater and offshore areas, where hydrocarbon reserves are abundant. Drillships, equipped with dynamic positioning systems, enable drilling in deeper waters and harsher marine environments. The first oil from these discoveries requires significant fossil fuel consumption, necessitating the need for advanced drilling techniques to minimize environmental effects and ensure compliance with regulatory requirements. Offshore infrastructure development and the increasing natural gas requirement further bolster market growth.
The market share growth by the onshore segment will be significant during the forecast period. Onshore drilling rigs, also known as land drilling rigs, are available in different sizes and power capabilities based on their applications. The demand for these rigs is increasing due to the growth in shale drilling, directional drilling, multilateral, and sour good drilling.
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The onshore segment showed a gradual increase in the market share of USD 36.50 billion in 2018. The onshore segment is capable of handling more pressure in adverse ambient environments and are more efficient, which is leading to their higher demand. Also, the operating cost of these activities is relatively lower than offshore oil and gas drilling activities, as the latter needs advanced technologies and equipment for drilling deeper wells in harsh environmental conditions. Such benefits are driving the growth of the segment.
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North America is estimated to contribute 37% 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 North American market has experienced substantial growth, driven primarily by the US and Canada, two major producers. The rise of unconventional exploration and production (E&P) activities, including shale production in the US and oil sands in Canada, has significantly increased crude oil and gas output. This development is also fueling its demand. In particular, the use of semi-submersible rigs in shallow water and shelf drilling has become prevalent. Pipelines and storage facilities are essential infrastructure for transporting and storing the extracted resources. Streamlined permitting processes and advanced subsea systems enable efficient drilling in ultra deepwater and untapped regions. Notable projects, such as the Winterfell and Ultra Water initiatives, showcase the industry's commitment to innovation and expansion.
Segment Overview
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market encompasses a wide range of technologies and services, including challenge, crude, and drilling ships, as well as Onshore and Offshore rigs. These rigs are essential for extracting natural resources, particularly oil and natural gas, from the earth. The market is driven by various factors, such as increasing energy demand, technological advancements, and government regulations. Challenge rigs, for instance, are used for drilling in extreme conditions, such as Arctic regions. Crude drilling rigs, on the other hand, are designed for deep waters.
Onshore rigs are used for drilling in land areas, while offshore rigs are used for drilling in the ocean. The use of advanced technologies, such as automation and remote operations, is becoming increasingly common in the drilling rig industry. This not only enhances safety and efficiency but also reduces operational costs. The market is expected to grow significantly in the coming years due to the increasing demand for energy and the ongoing exploration and production activities. In conclusion, the market plays a crucial role in the energy sector by providing the necessary infrastructure for extracting natural resources. The market is driven by various factors, including technological advancements, increasing energy demand, and government regulations. The use of advanced technologies is becoming increasingly common, enhancing safety, efficiency, and reducing operational costs.
The market is propelled by the demand for energy resources, particularly in Deepwater and ultra deepwater activities locations, where exploration and production activities are challenging yet essential for accessing significant oil and gas reserves. The drill ship and offshore drilling rigs play a crucial role in these operations, enabling well intervention and extraction in marine environments. With the increasing fossil fuel requirements, there are substantial investment opportunities in offshore exploration and production activities, especially in ultra deep water regions. The market's growth is further driven by advancements in technology, allowing operations at greater operating depths while ensuring safety and efficiency. Despite challenges, the global market remains pivotal in meeting global energy demands and driving hydrocarbon exploration in offshore areas.
Market Scope |
|
Report Coverage |
Details |
Page number |
170 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.63% |
Market growth 2024-2028 |
USD 14.6 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.18 |
Regional analysis |
North America, Middle East and Africa, Europe, APAC, and South America |
Performing market contribution |
North America at 37% |
Key countries |
US, Russia, China, Saudi Arabia, and Canada |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AP Moller Maersk AS, Archer Ltd., China Oilfield Services Ltd., Eni SpA, Helmerich and Payne Inc., KCA Deutag Alpha Ltd., Loews Corp., Nabors Industries Ltd., Noble Corp. Plc, NOV Inc., Parker Drilling Co., Patterson UTI Energy Inc., PR Marriott Drilling Ltd., Precision Drilling Corp., Schlumberger Ltd., Seadrill Ltd., Stena AB, Transocean Ltd., Valaris Ltd., and Weatherford International Plc |
Market dynamics |
Parent market analysis, Market forecast, 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. |
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 Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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