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The directional drilling market size is estimated to grow at a CAGR of 9.24% between 2022 and 2027. The market size is forecast to increase by USD 5,013.65 million. The growth of the market depends on several factors, including the growing consumption of oil and gas, the rising investments in the upstream oil and gas sector, and the increasing focus on unconventional oil and gas E&P activities.
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Automation in directional drilling techniques is the key trend driving the growth of the market. The drilling process in the oil and gas industry is highly dynamic as several variables affect this process. Variables that make the drilling process very challenging include varying geological conditions, interconnected drill site systems, and other operational variables that require continuous monitoring and adjustment such as the time delay between sensors in the drill control system, drill speed, and weight on bit. Although, it is expected that the increased efficiency of the drilling process and the higher quality of the drilled holes will reduce the impact of the above variables during drilling and optimize the process.
Moreover, the drilling processes are evolving with the declining human footprint and accelerated emphasis on system automation to improve the productivity, efficiency, safety, and quality of the drilling equipment. This led to the removal of small and medium enterprises from the well site and boosted the performance by achieving well penetration of more than one mile per day. The removal of small and medium enterprises allows them to operate in a supervisory mode with decision-making based on data acquisition and analysis. Hence, it is expected to drive the market in focus during the forecast period.
The offshore segment is estimated to witness significant growth during the forecast period. Offshore directional drilling services are available in different sizes and power capabilities that are perfectly suited to a particular drilling environment. Offshore directional drilling is classified as floaters and bottom supported. Floaters are further classified as semi-submersible and drillships and bottom-supported rigs are classified as jack-up rigs and platform directional drilling. The key factors such as rated water depth, leg length (for jack-up rigs), lifting capacity, drilling depth, top drive system, accommodation, the number of mud pumps, and the ability and power of mud pumps to circulate drilling fluids are used to differentiate offshore directional drilling.
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The bottom-supported rigs have some restrictions in terms of water depths because these directional drillings are tied up to the bottom of the sea and can only operate at water depths less than the length of their supporting structure or legs. Owing to the corrosive water environment, lack of stability (especially for floaters), space constraints, and the requirement for complex support and logistics drilling at offshore locations is more challenging than at onshore locations. Thus, this offshore segment will fuel the growth of the horizontal directional drilling market during the forecast period.
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APAC 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. Another region driving the growth of the horizontal directional drilling market is North America. Directional drilling services are mainly used to extract oil and natural gas from shale reservoirs. The US was the main in developing the directional drilling technique for shale extraction as the country had a large number of shale reserves. A rise in oil and gas production was shown in areas such as the Permian Basin in Western Texas and Eastern New Mexico, the Federal Offshore in the Gulf of Mexico, and the Bakken region in North Dakota and Montana.
Moreover, the government encourages the exploration and production (E&P) of non-conventional energy sources like tight gas and shale oil to produce oil and natural gas. Thus, drilling activities in the US increased to a great extent, which is the major factor responsible for the region's dominance in the market. Furthermore, Canada is the second largest adopter of unconventional oil and gas drilling in North America. Large oil and gas companies are investing in non-conventional E&P activities in the country. Offshore oil and gas production is also rising in the region because the Government of the US is implementing a strategic approach toward offshore oil and gas production. Therefore, with the increase in oil and gas drilling activities in this region, the market is expected to grow significantly during the forecast period.
In 2020, the COVID-19 outbreak negatively impacted the horizontal directional drilling market t in North America. However, due to the large-scale vaccination drives and the lifting of lockdown restrictions in 2021, major directional drilling operations were resumed. Moreover, the rising automation in oil and gas E&P activities and the growing number of offshore exploration projects in the region will drive the regional market to focus during the forecast period.
Growing oil and gas consumption is the key driver notably driving the growth of the global directional drilling market. Owing to increasing industrialization and urbanization in developing countries such as India and China, oil and gas consumption is expected to increase in the future. In addition, the demand for energy is also increasing significantly in developing countries due to rapid urbanization. This has raised the consumption of liquid fuels and natural gas.
Furthermore, increasing fuel consumption in emerging countries such as China and India is also expected to increase the demand for natural gas. According to the IEA, demand for oil and gas will continue to grow until 2040, while natural gas use is expected to increase by 45% by 2040. Oil and gas exploration and production companies will increase well-drilling activities to explore untapped reservoirs due to rising energy demand. Hence, the growth in the global demand for oil and gas will boost oil and gas E and P activities and will support the growth of the global directional drilling market during the forecast period.
Increasing adoption of alternative energy sources is the key challenge that impedes the growth of the global directional drilling market. Many developing and developed countries are adopting clean energy initiatives to reduce carbon emissions the adoption of renewable energy sources for power generation has increased globally. Renewable energy sources, including wind, geothermal, solar, and biomass, have a large potential to become reliable, affordable, and safe sources of energy generation. The adoption of renewable energy instead of conventional fuels is rising because renewable sources do not cause any environmental pollution and they are not contributing to climate change.
Moreover, renewable energy sources have gained importance as clean energy fuel sources and support global initiatives to reduce GHG emissions. Although, the rise in renewable energy sources is expected to affect the conventional fuel industry as high investments are toward renewable energy sources. This is expected to negatively affect the growth of the global oil and gas industry and is further expected to impede the growth of the global directional drilling market during the forecast period.
The market research 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 Directional Drilling 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.
Barbco Inc.: The company offers directional drilling services and products such as Barbco horizontal directional drill.
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 directional drilling market 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.
Directional Drilling Market Scope |
|
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 9.24% |
Market growth 2023-2027 |
USD 5013.65 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
8.08 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 37% |
Key countries |
US, China, India, Russia, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Barbco Inc., CHTC Jove Heavy Industry Co., Granite Construction Inc., H.H. Drill Tech Drilling Machinery Co. Ltd., Halliburton Co., Herrenknecht AG, Jiangsu Dilong Heavy Machinery Co. Ltd., Jindal Drilling and Industries Ltd., Nabors Industries Ltd., NOV Inc., Prime Drilling GmbH, Radius HDD Direct LLC, Schlumberger Ltd., Scientific Drilling International, Terra AG, Tracto Technik GmbH and Co. KG, Vermeer Corp., Xinyu FeiHu Pipeline Technical Equipment Co. Ltd., Xuzhou Construction Machinery Group Co. Ltd., and Goodeng International |
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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