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The global offshore drilling market size was at USD 31.26 billion in 2018 and is projected to reach USD 56.97 billion by 2026, exhibiting a CAGR of 7.9% during the forecast period.
The offshore industry is recovering after the fall in oil prices in mid-2014. National Oil Companies (NOC) are paying heed to expand overseas production on account of improving untapped hydrocarbon reserves. Many countries are extensively investing in offshore exploration & production (E&P) activities to meet the growing demand for hydrocarbons. Also, increasing interest in deepwater & ultra-deepwater exploration is likely to bode well for the offshore drilling market outlook. Overall, growing investment in securing future energy programs and high potential in the offshore industry is set to inflate the market size.
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Growing Competition in the Market to Meet the Production Goal to Aid the Market
The oil and gas industry is highly fragmented by leading producers of hydrocarbons in the world. National Oil Companies are expanding their operations to increase the production of oil and gas. Many countries make it obligatory for NOC to achieve the production targets set by the national government. Thus, the competitive nature of the market and target-oriented production will provide impetus to the market and drive the offshore drilling industry trends.
Exponential Demand for Heat and Electricity Inflate the Demand for Hydrocarbons
Heat and electricity are an integral part of daily lives without which one cannot sustain. The exponential growth in the population has increased the demand for both. A considerable part of heat and electricity is generated by using conventional fuel. In addition, extensive amount of electricity consumed for heating and air conditioning is likely to auger the demand for hydrocarbon. Following this trend, operators likely to invest in unexploited reserves of hydrocarbon, which is set to boost the market.
Growing Investment to Discover Untapped Hydrocarbon Reserves to Fuel the Market
The growth of the world is based on the production of oil and gas. Over the years, hydrocarbons have been massively used in power generation, transportation, manufacturing goods, and many other essentials. However, the exponential demand for conventional fuel on account of globalization, urbanization, and massive economic development is set to dampen the demand-supply ratio. Furthermore, many countries are increasing their capital expenditure (CAPEX) to secure future energy demand. Offshore hydrocarbons are proven to be one of the most reliable sources of energy that attract many investors. Thus, rising interest in recovering untapped hydrocarbon reserves anticipated to drive the market size.
Massive Economic Activity to Boost the Offshore Drilling Activity
The world is going through a massive economic transition phase owing to technological advancements such as Internet of Things (IoT), robotics, artificial intelligence (AI) and others. Moreover, the extensive demand for consumer goods on account of rising buying capacity is likely to bode well for the market. Developed and emerging economies are extensively investing in infrastructure, welfare schemes, and innovation & technology, which spurs the demand for hydrocarbons. Therefore, local players are increasing E&P activities to meet the domestic market and reduce imports of oil and gas.
High Operational Cost and Unstable Prices of Crude Oil to Impede the Growth
The offshore industry faces many challenges such as high operational cost, severe environmental effects, special equipment & machinery required for operations, and lack of skilled resources. Furthermore, the operators must fall in line in accordance with regulations to avoid spillage of oil and threats to the ocean ecosystem. Also, uncertainly over crude oil prices in the international market limit the new investment. These factors retard the growth of the market of offshore drilling.
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Rising Ultra-Deepwater Activities to Provide Impetus to Drillships
Drillships are projected to dominate the offshore drilling market share owing to growing investment in deepwater and ultra-deepwater exploration. They are deployed in water depths ranging from 2,000 feet to more than 10,000 feet. Drillships are equipped with a drilling derrick, moon pool, mooring, or positioning equipment, as well as helipad for transportation. Subsequently, semisubmersibles and jackups rigs are also extensively used for E&P in deep and shallow waters.
Deepwater Production Set to Dominate the Market
Operators are shifting their focus from shallow water to deepwater production owing to considerable hydrocarbon potential. Deepwaters and ultra-deepwaters hold a considerable amount of hydrocarbons. Moreover, major oil and gas companies are increasingly investing in recovering unexploited hydrocarbon reserves.
Asia-Pacific Offshore Drilling Market Size, 2018 (USD Billion)
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The enormous presence of hydrocarbons beneath the sea set to brighten the offshore drilling industry outlook. Asia-Pacific is one of the most promising regions and possesses high potential in discovering untapped hydrocarbon reserves. A surge in merger and acquisition activity in the region is likely to bode well for the market of offshore drilling. In addition, National Oil Companies (NOC) are investing in offshore E&P activities to increase domestic production, providing impetus to the market. Similarly, many of the crucial companies in the Middle East & Africa (MEA) are paying keen attention to expanding offshore activities to meet their production goals. Predominantly, Qatar, Saudi Arabia, and the United Arab Emirates are increasing their fleet count. For instance, ANDOC recently announced a major rig fleet expansion to support the company’s upstream growth plans and enable the delivery of its 2030 Smart Growth Strategy.
Meanwhile, there are other provinces which are playing a significant role in driving the market of offshore drilling. In Europe, few countries are investing extensively in exploring new offshore hydrocarbons reserves to increase the domestic production. Norway and UK account considerable market share owing to growing exploration in the Norwegian continental shelf. Furthermore, Latin America is focusing on increasing deepwater and ultra-deepwater exploration to produce considerable oil and gas. Brazil is expected to dominate the regional market on account of growing investment in offshore exploration. However, offshore drilling in North America is mainly concentrated in the Gulf of Mexico, which provides slight growth in the foreseeable future.
Established Companies Set to Acquire Considerable Market Share
High-risk factors associated with the hydrocarbon industry due to unstable nature of the market likely to limit the scope for the new entrant. However, the market is highly dominated by some of the renowned drilling contractors in the world. High potential to recover untapped hydrocarbons is likely to provide lucrative opportunities for the industry players. Moreover, the companies are concentrating on expanding their fleet size to capture considerable share in the market, according to the offshore drilling market forecast. Also, many companies are investing in technology to improve the performance of their fleets to optimize well construction activities.
Energy and power consumption are at a peak owing to massive economic development across the world. Electricity has entirely changed the world with ease of operation and faster delivery of products across the globe. Meanwhile, conventional fuel is supporting the major industry outlook. Oil & gas accounts for extensive share in the primary energy consumption in different industry verticals. With population explosion, urbanization, and massive infrastructure development, the demand for hydrocarbons is continuously increasing. The operators and national oil & gas companies are massively investing in E&P activities to cope with the exponential demand. Therefore, the growing subsea operation around the world is likely to provide a profitable market for the offshore drilling industry.
The offshore drilling market report offers an elaborative analysis of numerous factors affecting the global market. These include opportunities, growth drivers, threats, key developments, and restraints. In addition to this, it further helps in analyzing, segmenting, and defining the offshore drilling market based on different segments such as rig type and water depth. It strategically analyzes several strategies such as product innovations, mergers, alliances, joint ventures, and acquisitions adopted by players in the industry.
An Infographic Representation of Offshore Drilling Market
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Besides this, the report provides a comprehensive analysis of market dynamics, emerging offshore drilling market trends, and the competitive landscape of the offshore drilling industry. Key insights offered in the report are the adoption trends of residential industry analysis by individual segments, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, and key industry trends.
Value (USD Billion)
By Rig Type
By Water Depth
As per Fortune Business Insights study, the market is forecasted to reach USD 56.97 billion by 2026 with a CAGR of 7.9% (2019 -2026).
In 2018, the market was USD 31.26 billion and anticipated to reach USD 56.97 billion by 2026 growing at a steady CAGR of 7.9% during the forecast period (2019 -2026).
The drillships segment is expected to lead the market owing to rising deepwater & ultra-deepwater exploration.
The market size in Asia-Pacific was at USD 11.23 billion in 2018.
Increasing investment in recovering untapped hydrocarbon reserves likely to drive the market.
The top players in the market are Transocean, Nabors Industries, Seadrill, Saipem, and Valaris plc.
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