The global offshore drilling market is expected to post a CAGR close to 9 percent during the period 2019-2023, according to the latest market research report by Technavio.
A key factor driving the growth of the market is the increasing deepwater and ultra-deepwater E&P activities. Due to vast untapped reserves, deepwater and ultra-deepwater projects are expected to increase during the forecast period because of the rising crude oil prices. Hence, companies have expanded their drilling and production operations in areas with large oil reserves such as the GOM and Brazil. Furthermore, it is expected that the global offshore deepwater oil production will increase by 2.7 mbpd between 2017 and 2040. Offshore investments are also expected to grow at a CAGR of over 11 percent during 2018-2021. Subsequently, the rise in investments in offshore projects will propel E&P activities in deepwater and ultra-deepwater locations. Hence, the increase in E&P activities in deepwater and ultra-deepwater resources will drive the global offshore drilling market during the forecast period.
As per Technavio, the declining cost of offshore projects will have a positive impact on the market and contribute to its growth significantly over the forecast period. This global offshore drilling market 2019-2023 research report also analyzes other important trends and market drivers that will affect market growth over 2019-2023.
Global offshore drilling market: Declining costs of offshore projects
Because of the complexities and the need for additional equipment and methods for processing and transportation after extraction, the expenses incurred in offshore drilling projects are higher than that of onshore drilling projects. Offshore drilling projects need a longer timeline than onshore drilling projects. Also, most of the offshore oil and gas drilling contracts last several years. However, at present, the costs of offshore projects are decreasing as designs are being standardized, simplified, and downsized, and a large projection in the market for offshore equipment and services is helping, reduce costs. Also, as crude oil prices have started rising, more investments are expected in offshore oil and gas projects, which will drive the global offshore drilling market during the forecast period.
“Currently, there is an increase in the global offshore rig count, as several oil and gas companies are investing significantly in offshore drilling projects. The gradual recovery in prices of crude oil from the third quarter of 2016 resulted in a global increase in the number of active offshore rigs. This led to the growth in the number of wells being drilled in both offshore deepwater and ultra-deepwater well sites. Thus, these factors are expected to drive the global offshore drilling market during the forecast period,” says an analyst at Technavio.
Global offshore drilling market: Segmentation analysis
This market research report segments the global offshore drilling market by applications (shallow water, deep water, and ultra-deepwater) and geographical regions (APAC, Europe, MEA, North America, and South America).
The shallow water segment held the largest market share in 2018. Offshore drilling in shallow water is relatively safe when compared with deepwater and ultra-deepwater, as it reduces the possibility of oil spills. This makes the process safe and economically feasible.
APAC held the largest market share in 2018. There has been an increase in demand for offshore oil and gas production to suffice the energy needs, especially from the developing countries. Moreover, rising fuel consumption is also driving the need for offshore drilling.
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