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The directional drilling market size is estimated to grow by USD 5.01 billion at a CAGR of 9.24% between 2022 and 2027. The growing consumption of oil and gas is driven by various factors such as population growth, urbanization, and economic development, particularly in emerging economies. Rising investments in the upstream oil and gas sector are essential for expanding production capacity and exploring new reserves, especially in challenging environments like deepwater or shale formations. The increasing focus on unconventional oil and gas E&P activities, such as shale gas and tight oil, has become more prominent due to technological advancements that have made their extraction more economically viable.
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This market report extensively covers market segmentation by application (offshore and onshore), technique (rotary steerable system and conventional methods), and geography (North America, APAC, Europe, Middle East and Africa, 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.
The offshore segment is estimated to witness significant growth during the forecast period. Onshore oil and gas E and P operations are cheaper than offshore operations. Moreover, upstream companies are affected adversely when crude oil prices fall as the price at which crude oil is sold is determined by the market, but the production costs are largely fixed. Thus, expensive and capital-intensive E and P operations have a negative impact on investment decisions and profits. They result in delays or cancellations of directional drilling activities. Therefore, the volatility of crude oil prices will pose a challenge for the global directional drilling market during the forecast period.
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The bottom-supported rigs have some restrictions in terms of water depths because these 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 market is North America. These services are mainly used to extract oil and natural gas from shale reservoirs. The US was the main in developing this 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, these 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 activities in this region, the market is expected to grow significantly during the forecast period.
The market is influenced by various factors, including the constant high prices of oil and the demand for energy sources. This market is driven by the need for efficiency in these services for exploration activities, particularly in deepwater and ultra-deepwater projects. Directional drilling, a method used in such projects, enables companies to access deep-water offshore fields more efficiently. The market is also affected by environmental regulations and the growing interest in green energy sources like geothermal energy. Equipment cost and equipment efficiency are key considerations, along with ensuring safety through evacuation plans and compliance with regulations. The global impact of the directional drilling market reflects trends in globalization and the evolving landscape of energy substation technologies.
Growing oil and gas consumption is the key driver notably driving the growth of the market. Due to increasing industrialization and urbanization in countries like India and China, there is an expected rise in oil and gas consumption. Additionally, the energy demand is increasing significantly in these nations due to rapid urbanization, leading to higher consumption of liquid fuels and natural gas.
Moreover, the growing fuel consumption in emerging economies such as China and India is anticipated to drive up the demand for natural gas. This trend is expected to lead to increased drilling services, with a focus on efficiency and the use of energy sources. Additionally, there will be a heightened emphasis on environmental considerations and compliance with environmental regulations, which may impact equipment choices and costs in the industry. According to the IEA, the demand for oil and gas is projected to continue growing until 2040, with a 45% increase in natural gas use by 2040. To meet the rising energy demand, oil and gas exploration and production companies will increase well-drilling activities to explore untapped reservoirs. As a result, the global directional drilling market is expected to grow, supported by the increasing global demand for oil and gas, during the forecast period.
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. However, it is expected that the increased efficiency of this 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 processes are evolving with the declining human footprint and accelerated emphasis on system automation to improve the productivity, efficiency, safety, and quality of the 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.
Increasing adoption of alternative energy sources is the key challenge that impedes the growth of the 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. However, 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 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 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 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.
The market is witnessing significant growth due to advancements in technology and tools, particularly in the oil & gas industry. Techniques such as horizontal drilling and extended reach drilling are enhancing the efficiency of oilfield operations. The discovery of new oilfields and the exploration of tight oil reserves are driving the demand for directional drilling services. Drillers are using rotary steerable systems and downhole motors for faster installation and lower costs. The market is also influenced by factors such as crude oil prices, demand and supply of oil, and renewable energy production. Ongoing projects and operational costs are key considerations for oil field operators and oil & gas companies in implementing directional drilling methods.
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 5.01 billion |
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 Forecasting, 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 market 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 Technique
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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