Market Trends of Directional Drilling Services Industry
This section covers the major market trends shaping the Directional Drilling Services Market according to our research experts:
Offshore Segment Expected to Witness Significant Growth
- The offshore oil and gas industry accounts for about 30% of the global crude oil production. The Middle East, North Sea, Brazil, the Gulf of Mexico, and the Caspian Sea are the major offshore oil and gas producing regions.
- Declining costs of oil production with more significant cost savings make deepwater the economical source of supply. The average breakeven price for all unofficial projects has come down to approximately USD 50 per barrel, declining close to 10% in the last few years. This scenario is likely to raise the demand for directional drilling services in deepwater during the forecast timeline.
- Deepwater oil production is majorly concentrated in four countries, Angola, Brazil, Nigeria, and the United States. Significant offshore reserves are likely to institute a favorable business scenario for the industry participants operating in the directional drilling services market in the near future.
- The combined production from tight oil, oil sands, and deepwater is estimated to reach 21 mb/d by 2040 and is expected to account for almost a quarter of the global crude oil production. The changing economics and the exhaustion of some shallow offshore resources have compelled the producers to shift toward deepwater and ultra-deepwater resources.
- Therefore, owing to the above points, the offshore segment is expected to witness significant growth in the directional drilling services market during the forecast period.
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North America Expected to Dominate the Market
- Due to the demand from the United States and Canada, North America led the directional drilling services market and was expected to be the largest market as of 2020.
- The United States has one of the largest technically recoverable shale gas reserves and the second-largest tight oil reserves in the world. The technological development in hydraulic fracturing and low breakeven prices have supported the oil and gas directional drilling activity in the region.
- In the United States, the directional drilling services market is primarily driven by new offshore projects and the redevelopment of matured fields. Due to the recovering drilling activity, the gas output was expected to reach an average of 47 billion cubic feet per day by 2020. The production from Marcellus/Utica shale and new oil wells is expected to account for most of the growth in gas production.
- In Canada, the biggest increase in activity is expected from the country's main crude oil and gas producing region, Alberta. Consequently, the directional drilling services market is estimated to grow at a moderate pace in Canada.
- Therefore, rapid growth in the drilling activities and the increase in many horizontal wells in the region are expected to drive the directional drilling services market during the forecast period.
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