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The drilling rig market is estimated to grow at a CAGR of 6.16% between 2022 and 2027. The size of the market is forecast to increase by USD 15.36 billion. The growth of the market depends on several factors, including an increase in oil and gas demand, rising investments in the upstream oil and gas sector, and the increasing focus on unconventional oil and gas E&P activities.
This report extensively covers market segmentation by application (onshore and offshore), type (crude oil and natural gas), and geography (North America, Middle East and Africa, Europe, APAC, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increase in oil and gas demand is notably driving the market growth, although factors such as fluctuations in global crude oil prices may impede the market growth. 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.
Key Drilling Rig Market Driver
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 for oil and gas globally.
Subsequently, oil and gas E&P companies are increasing their drilling 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 for oil and gas will fuel oil and gas drilling activities. This, in turn, will drive the growth of the global drilling rig market during the forecast period.
Significant Drilling Rig Market Trend
The rise in deep-water and ultra-deepwater E&P activities is an emerging trend in the market. 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 oil and gas E&P activities in offshore deepwater and ultra-deep-water oil and gas wells will stimulate the demand for drilling rigs during the forecast period, thereby driving the growth of the market in focus.
Major Drilling Rig Market Challenge
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 global drilling rig market.
Key Drilling Rig Market Customer Landscape
The 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Drilling Rig Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product launches, to enhance their presence in the market.
Archer - The company operates a fleet of AC-powered land drilling rigs in Latin America.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
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 drilling, and sour good drilling.
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The onshore segment showed a gradual increase in the market share of USD 33.85 billion in 2017 and continued to grow by 2021. Onshore drilling rigs are 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 drilling 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 US and Canada are the major markets for drilling rigs in North America. These countries are among the largest oil and gas producers in the world. Oil and gas production output in both these countries has increased significantly due to the rise in unconventional E&P activities, including the drilling of shale reserves.
Canada has vast oil and gas reserves. Oil and gas companies in Canada are focusing on increasing production through E&P activities, which is contributing to the demand for drilling rigs. The US is among the major countries undertaking offshore oil and gas exploration in the region. Government support is also propelling offshore oil and gas projects in North America. The US government is also planning to drill and explore almost all its offshore oil and gas resources along the Atlantic, Arctic, and Pacific coasts, which will drive the demand for drilling rigs in the region.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. The pandemic negatively affected the pace of development of offshore oil and gas projects in the region, causing a decline in demand for drilling rigs in 2020. However, the resumption of the oil and gas industry and the initiation of mass COVID-19 vaccination drives encouraged the development of new offshore oil and gas projects. This increased the demand for drilling rigs in North America.
Technavio categorizes the global drilling rig market as a part of the global oil field equipment and services within the global oil and gas market. The global oilfield equipment and services market covers products and companies engaged in upstream exploration and production (E&P) operations, production of equipment or service contracts, and is an important manufacturing sector that caters to the needs of the oil and gas upstream sector. Technavio calculates the global oilfield equipment and services market size based on combined revenue generated by manufacturers/providers of equipment, supplies, and services. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The 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. The market has been segmented by application (onshore and offshore), type (crude oil and natural gas), and geography (North America, Middle East and Africa, Europe, APAC, and South America).
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Drilling Rig Market Scope |
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Report Coverage |
Details |
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Page number |
167 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.16% |
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Market growth 2023-2027 |
USD 15.36 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
5.15 |
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Regional analysis |
North America, Middle East and Africa, Europe, APAC, and South America |
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Performing market contribution |
North America at 37% |
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Key countries |
US, Canada, Saudi Arabia, China, and Russia |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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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., 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 Plc, and Weatherford International Plc |
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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. |
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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 report to meet your requirements. Get in touch
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
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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