Offshore Drilling Rigs Market by Type, Application, and Geography - Forecast and Analysis 2023-2027

Offshore Drilling Rigs Market Forecast 2023-2027

The offshore drilling rigs market size is forecast to increase by USD 2.82 billion at a CAGR of 3.16% between 2022 and 2027. The market's expansion hinges on several critical factors, notably the escalating investments in the upstream oil and gas sector. This surge in investment reflects a growing confidence in offshore marginal fields, which are increasingly seen as having high potential for extraction. Additionally, the formulation of new oil and gas exploration policies has been instrumental in shaping market dynamics. These policies often incentivize exploration and development activities, fostering a more conducive environment for industry growth. Collectively, these factors contribute to a positive outlook for the offshore drilling market, encouraging both established players and newcomers to capitalize on emerging opportunities. As technology continues to advance and regulatory frameworks evolve, the market is poised for sustained expansion in the foreseeable future.

What will be the size of the Market During the Forecast Period?

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Market Segmentation

This report extensively covers market segmentation by type (bottom-supported rigs and floating rigs), application (shallow water, deepwater, and ultra-deepwater), 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.

Market Dynamics and Customer Landscape

The market drivers include increasing exploration activities in untapped regions and rising demand for oil and gas reserves. Deepwater and ultra-deepwater activities are key trends driving market growth, alongside advancements in technology and infrastructure. Challenges such as environmental concerns, particularly regarding the aquatic environment, and the complexity of operating in deepwater and ultra-deepwater regions pose significant hurdles. Companies like Kosmos Energy are driving innovation with projects like the Winterfell project and Greater Tortue Ahmeyim LNG in Mauritania and Senegal. 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 Market Driver

The rising investments in the upstream oil and gas sector are notably driving offshore drilling market growth. Energy security is becoming a critical factor in most countries owing to population growth and rapid industrialization. Therefore, many countries are exploring untapped oil and gas resources using advanced technologies. Moreover, the production of oil and natural gas from conventional oilfields is declining.

Moreover, to address this issue and maximize the revenue from oilfields, oil and gas operators are increasing their investments in mature oil and gas fields. Oil and gas E&P companies are also increasing their upstream investments to boost their production. Thus, the increasing investments in the upstream oil and gas sector are likely to boost oil and gas E&P activities, which, in turn, will drive demand during the forecast period.

Significant Market Trend

Technological advances in Mobile offshore drilling units (MODUs) are the primary trend in the market. MODUs are structures or vessels that are used in offshore drilling operations for the E&P of subsea oil and gas resources. These include drill ships, jack-up rigs, and semi-submersible rigs, which can be moved in marine waters from one well to the other for oil and gas drilling operations.

Furthermore, technological advancements improve production efficiency and, thus, drive a reduction in operating costs and improve the profit margins of oil and gas E and P companies. Technological advancements in MODUs will complement the efficiency of E and P operations and the safety of oil and gas E and P operations in offshore oilfields. Technological improvements in this infrastructure help upstream oil and gas companies boost oilfield production from offshore reserves. Thus, technical advancements in MODUs will support the growth of the offshore drilling market during the forecast period.

Major Market Challenge

The uncertainty associated with low crude oil prices is the major challenge impeding the offshore drilling market growth. The price of crude oil has witnessed significant fluctuations in the recent past. Crude oil and natural gas prices are uncertain. Frequent fluctuations in global crude oil prices disrupt various activities in the oil and gas value chain.

Moreover, these fluctuations affect the future outlook of the E&P enterprises involved and hence affect investments. The profitability of companies is also reduced, with many registering significant losses. Hence, the uncertainty associated with the price of crude oil can affect the growth of the market during the forecast period.

Key Market Customer Landscape

The market growth analysis 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

Who are the Major Market Players?

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.

Parker Drilling Co. - The company offers offshore drilling rig solutions such as Parker Rig 15B, Parker Rig 30B, Parker Rig 72B. This segment focuses on providing offshore and onshore contract drilling and drilling related services.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Archer Ltd.
• China Oilfield Services Ltd.
• Diamond Offshore Drilling Inc.
• Helmerich and Payne Inc.
• KCA Deutag Alpha Ltd.
• Nabors Industries Ltd.
• Noble Corp. Plc
• NOV Inc.
• Patterson UTI Energy Inc.
• PR Marriott Drilling Ltd.
• Precision Drilling Corp.
• SAIPEM SpA
• Schlumberger Ltd.
• Seadrill Ltd.

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.

What is the Fastest-Growing Segment in the Market?

The market Segmentation is a complex landscape shaped by various factors such as exploration activities in untapped regions and environmental concerns regarding the aquatic environment. One of the key drivers of this market is the focus on deepwater and ultra-deepwater activities, where substantial oil and gas reserves are believed to exist. In terms of technology, advancements in drilling techniques and equipment have allowed companies to access previously inaccessible reserves in deepwater and ultra-deepwater regions. This has led to significant offshore discoveries and increased interest from industry players like Kosmos Energy, known for projects like the Winterfell project and the Greater Tortue Ahmeyim LNG in Mauritania and Senegal. Offshore drilling rigs are categorized based on their operating depth, with ultra-water and deep-water rigs being designed to reach greater depths compared to shallow-water rigs. Each type of rig has its advantages and is suited for specific onshore and shallow-water reserves or for venturing into deeper waters.

The market share growth of the bottom-supported rigs segment will be significant during the forecast period.  In 2022, the bottom-supported rigs segment held a major share of the market due to the high adoption of jack-up rigs. Jack-up rigs can be classified into high-specification rigs, standard rigs, and harsh environment rigs. The increasing focus on oil discovery activities in Alaska and Scotland will increase the demand for high-specification and harsh environment jack-up rigs during the forecast period. 

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The bottom-supported rigs segment was valued at USD 11.67 billion in 2017 and continue to grow by 2021. Bottom-supported rigs offer more stability and a motion-free platform during operations as they are fixed to the seabed. They can also be mobilized relatively quickly and easily. They can be upgraded according to requirements. This increases their lifespan and equips them with the latest technology. Due to the common availability of jack-up rigs, the low-cost mobilization, and their relatively inexpensive construction cost when compared with floating rigs, jack-up rigs are preferred for depths of up to 500 feet. The increasing number of exploration and production activities across the world will increase the demand for bottom-supported rigs during the forecast period. 

Which are the Key Regions for the Market?

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North America is estimated to contribute 35% 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.

Moreover, the US contributes most of the revenue to the market in North America. The market in North America is expected to grow at a steady rate during the forecast period. The major contributors of revenue to the market in the region are the US, Canada, and Mexico. The growth of the market in the region is driven by increased drilling activities. The discovery of new oil and gas reserves in Alaska will increase the demand in the region. 

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides a market research and growth analysis of the latest market trends and growth opportunities from 2017 to 2027. 

• Type Outlook 
  • Bottom-supported rigs
  • Floating rigs

• Application Outlook 
  • Shallow water
  • Deepwater
  • Ultra-deepwater

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Brazil
    • Argentina

Market Analyst Overview

The market is driven by a range of factors contributing to its dynamic landscape. Advanced drilling techniques, including the use of Artificial Neural Networks and Machine Learning, have revolutionized exploration activities in deepwater and ultra-deepwater regions. Energy companies are heavily investing in offshore infrastructure, particularly in areas like Greater Tortue Ahmeyim LNG, Senegal, and Mauritania, where offshore discoveries hold significant hydrocarbon potential. The market also sees a surge in exploration contracts and investments, especially in regions with untapped reserves and lucrative Estimated Daily Rate (EDR) prospects. 

Furthermore, the market is witnessing significant growth driven by investment in ultra-deepwater and deepwater activities. These regions hold vast untapped potential for hydrocarbons, making them attractive for petroleum companies seeking new reserves. The market is characterized by various types of offshore drilling rigs, including drill ships and rigs designed for different operating depths, various tunnels operating depth, especially ultra-deep water. In the Mexican oil and gas sector, there is a growing focus on expanding offshore drilling operations to tap into offshore reserves. Existing contracts play a crucial role in sustaining drilling activities, providing stability and revenue for the companies involved. Drilling technologies have also evolved significantly, enabling efficient exploration and extraction processes in challenging environments.

However, this market is not without challenges. Environmental concerns, such as crude oil volatility and offshore drilling's impact on the aquatic environment, necessitate the use of advanced equipment like Remotely Operated Vehicles (ROVs) and Blowout Preventers. Additionally, the complexity of offshore environments, dynamic positioning systems, and subsea systems pose technical challenges that require innovative solutions from companies involved in offshore drilling rigs operating at various depths, including drillships and shelf drilling rigs. Overall, the Market is characterized by its technological advancements, environmental considerations, and strategic investments in both shallow-water and ultra-deepwater reserves like those in the Winterfell project.

Moreover, offshore drilling rigs are categorized based on their operating depth, with ultra-water and deep-water rigs being designed to reach greater depths compared to shallow-water rigs. Each type of rig has its advantages and is suited for specific onshore and shallow-water reserves or for venturing into deeper waters. Overall, the offshore drilling rigs market is poised for continued growth as investments pour into untapped regions, supported by advancements in drilling technology and a favorable outlook for the oil and gas industry.

 

Market Scope
Report Coverage	Details
Page number	165
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 3.16%
Market growth 2023-2027	USD 2.82 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	2.15
Regional analysis	North America, Middle East and Africa, Europe, APAC, and South America
Performing market contribution	North America at 35%
Key countries	US, Saudi Arabia, China, Russia, and Brazil
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Archer Ltd., China Oilfield Services Ltd., Diamond Offshore Drilling Inc., Helmerich and Payne Inc., KCA Deutag Alpha Ltd., Nabors Industries Ltd., Noble Corp. Plc, NOV Inc., Parker Drilling Co., Patterson UTI Energy Inc., PR Marriott Drilling Ltd., Precision Drilling Corp., SAIPEM SpA, Schlumberger Ltd., Seadrill Ltd., Stena AB, Transocean Ltd., Valaris Plc, and Weatherford International Plc
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, and 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.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the industry across North America, Middle East and Africa, Europe, APAC, and South America
• Thorough market research report analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market growth and forecasting analysis of factors that will challenge the growth of market companies

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