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The offshore drilling market size is forecast to increase by USD 8.18 billion, at a CAGR of 4.42% between 2023 and 2028. The report includes historic market data from 2018-2022. The market is experiencing a positive trend with decreasing costs of offshore projects, the introduction of advanced automated drilling rigs, and a growing demand for offshore gas.
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The emergence of next-generation automated drilling rigs is an emerging trend shaping market growth. Offshore rigs can be hazardous for workers and have led to fatal accidents and environmental disasters over the last few decades. Thus, rig operators are finding ways to ensure the safety of the workers, along with reducing the costs of extracting crude oil. Such instances can be reduced with technological advances such as automation for drilling rigs. Rig automation involves using sensors in drilling rigs and the associated equipment.
Further, the technology will integrate drilling processes such as the bottom hole assembly (BHA), drill bit, and other downhole tools with the surface. This enables the automation of mechanical processes of geo-steering. Therefore, the drilling rig automation will ease the offshore drilling process, thus proliferating offshore drilling activities, which will drive the growth of the market.
The shallow water segment is estimated to witness significant growth during the forecast period. Shallow water includes depths of up to 500 feet. The shallow water segment of the market is expected to observe rapid growth. Offshore drilling in shallow water has been done since World War II. It is comparatively safe, as oil spills are very low and rare in shallow water, and drilling is less complex when compared with deepwater and ultra-deepwater, resulting in better safety and economic viability.
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Further, these factors are likely to drive the adoption of E&P activities in shallow water. Due to the need for its structure to rest on the seabed, submersibles are employed in shallow water. Their buoyancy tanks are drained of water and filled with air before being transferred, making them float and allowing tug boats to pull them. Only very shallow water can be employed for submersible rig operations. In the event of storms, the rig deck must be up to 100 meters above the ocean surface. Tall rig frameworks are impractical to build, especially when backups are more useful and adaptable. For extremely shallow water, drill barges are another choice. They are towed along by a tugboat and lack the clearance above the ocean's surface to endure severe storms. Only extremely safe environments, such as inland lakes, will be appropriate for the usage of a drill barge. Such factors are expected to drive the growth of the segment and the market during the forecast period.
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North America is estimated to contribute 40% 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 the region is expected to grow rapidly during the forecast period. North America has been considered a major region in the oil and gas industry. With the gradual rise in crude oil prices, the region has resumed its deep and ultra-deep oil and gas projects in the GOM. This resuming of projects is estimated to drive the market in the region.
In addition, the US is among the major countries that undertake offshore oil and gas exploration in the region. Moreover, 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 growth of the market in the region. This will increase the demand for offshore drilling, which, in turn, will drive the growth of the market in North America during the forecast period.
The rise in the continental shelf, lakes, inland seas, and ultra-deepwater E and P activities are notably driving the market growth. Offshore locations, including oil production and popular sources of oil and gas E and P, play a crucial role in enhancing energy independence, fostering economic growth, and meeting the growing oil & gas demand. After shallow-water drilling, oil and gas companies shifted their focus to deepwater and ultra-deepwater resources, considering factors such as Brent oil prices, hydrocarbons, and the need for substantial CAPEX. Oil production in the ultra-deepwater environment is significantly more expensive than conventional methods, and drilling in offshore locations is a challenging task compared to drilling in onshore locations due to harsh weather conditions.
Further, deepwater and ultra-deepwater projects, driven by factors like population growth, infrastructure demands, and concerns about oil & gas imports and the environment, are expected to increase during the forecast period to meet the rising demands. As per the IIEA, global offshore deepwater oil production will increase by 2.7 mbpd between 2017 and 2040. The rise in investments in offshore projects will propel E and P activities in deepwater and ultra-deepwater locations, addressing the critical aspects of heat and electricity generation. Hence, the rise in E and P activities in deepwater and ultra-deepwater resources will drive the market during the forecast period.
Stringent government regulations are a significant challenge hindering market growth. Oil and gas drilling activities broadly involve well intervention, well completion, and production activities. Certain well-completion activities, such as hydraulic fracturing and acidizing, negatively impact the surrounding environment. The migration of natural gas and well-completion chemicals to the surface, degradation of air quality, and groundwater contamination are some of the environmental impacts that are caused by the production of crude oil. It is mandatory to follow environmental regulations during production operations, and the regulations are strict in certain environmentally sensitive regions. If such regulations are violated, it can harm the revenue of the organization, along with severe environmental damage.
Moreover, as accidents cannot be eliminated from the system, several cases of oil and condensate spills have been reported across the world, and they have had prolonged environmental effects, such as damage to aquatic life. After the Deepwater Horizon incident, which occurred in the Gulf of Mexico, the US federal government came up with some petroleum exploration regulations. These rules introduced third-party verification of drilling equipment and enhancement of real-time monitoring of operations. This puts massive pressure on the operations of offshore drilling service companies, which will negatively impact the growth of the market during the forecast period.
The market forecasting research report includes the adoption lifecycle of the market research and growth, 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 market growth and forecasting 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.
Archer Ltd. - The company offers engineering and OEM management services for offshore drilling operations in severe and legally-mandated conditions on fixed, modular, and mobile drilling facilities.
The research 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 report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market, fueled by the exploration of hydrocarbons in continental shelves and inland seas, plays a pivotal role in enhancing energy independence and fostering economic growth. Amidst the rising oil & gas demand and Brent oil prices, key players like China National Offshore Oil Corporation capitalize on strategic projects such as Enping Oilfield. The World Investment Report indicates significant investments in CAPEX for heat and electricity generation, crucial for meeting the demands of population growth and developing infrastructure. Addressing environmental concerns, offshore drilling aligns with carbon emission targets, supporting initiatives like the COP26 Paris Agreement and the transition to net-zero carbon emissions.
Major entities like Oil and Natural Gas Corp. (ONGC), TotalEnergies, and ExxonMobil lead exploration efforts in Krishna Godavari and Cauvery basins, with technology breakthroughs driving advancements in drillships, drill risers, and efficient utilization of oil and gas reserves. As global banks recognize the market's potential, offshore drilling remains instrumental in the transition to a sustainable energy landscape.
Market Scope |
|
Report Coverage |
Details |
Page number |
175 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.42% |
Market Growth 2024-2028 |
USD 8.18 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.3 |
Regional analysis |
North America, Middle East and Africa, Europe, APAC, and South America |
Performing market contribution |
North America at 40% |
Key countries |
US, Saudi Arabia, United Arab Emirates, China, and Russia |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AP Moller Maersk AS, Archer Ltd., Baker Hughes Co., China National Offshore Oil Corp., Eni SpA, Halliburton Co., Hercules Offshore Inc., KCA Deutag Alpha Ltd., Loews Corp., Nabors Industries Ltd., Noble Corp. Plc, Pacific Drilling Co., Parker Drilling Co., Saudi Arabian Oil Co., Schlumberger Ltd., Seadrill Ltd., Sembcorp Marine Ltd., Transocean Ltd., Valaris Ltd., and Weatherford International Plc |
Market dynamics |
Parent market growth 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 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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