Market Trends of Offshore Contract Drilling Industry
This section covers the major market trends shaping the Offshore Contract Drilling Market according to our research experts:
Development of Deepwater and Ultra-Deepwater Reserves to Drive the Market
- The investments related to deepwater projects are expected to be limited, before 2025. These resources are typically more expensive to develop, take a longer time to reach full production, and require additional investment in infrastructure, because of their presence in remote locations. However, most of the projects that are currently under development are expected to continue their operations.
- Despite high fixed costs and the requirement of long lead times from project conception to the first production, offshore deepwater oil projects provide large production volumes that can achieve relatively low per-barrel operating costs over the reservoir life cycle.
- The majority of deepwater or ultra-deepwater production takes place in four countries: Brazil, the United States, Angola, and Norway. Brazil is a world leader in the development of deepwater and ultra-deepwater projects. This positive growth trend in crude oil production, from deepwater and ultra-deepwater resources in these regions, is expected to drive the demand for offshore contract drilling market, during the forecast period.
- In 2018, Brazil and the United States together accounted for more than 90% of ultra-deepwater production globally. The presence of the most experienced international oil companies in the deepwater development and largest deepwater reserves makes the United States and Brazil the most attractive countries for upstream deepwater investment.
- All the above-mentioned factors have been driving the demand for offshore contract drilling market over the study period.
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Europe to Dominate the Market
- Europe is expected to dominate the offshore contract drilling market and is expected to grow at a significant rate over the forecast period.
- Russia had a 106.2 billion barrel proved reserve, as of 2018. Whereas daily oil production in the country is about 11.4 million barrel, and annual export is of approximately USD 129.2 billion. There are already more than 9,500 wells drilled, as of 2019.
- In total, 102 wells were drilled on the UKCS in 2018 (85 development, eight exploration, and nine appraisal). With the most recent tax break, production activities in discoveries, as mentioned earlier, are expected to commence during the forecast period.
- The Norwegian parliament has opened most of the North Sea, the Norwegian Sea, and Barents Sea South (including Southeast) for petroleum activities. The Norwegian Petroleum Directorate has estimated that around 47% of all the remaining resources on the shelf are still undiscovered. In the Norwegian shelf, between 2007 and 2017, about 380 wildcat wells were completed. More than 50%, of which, have resulted in discoveries, which is a high success rate per wildcat well by international standards.
- Therefore, rising offshore oil and gas activities in the region are expected to increase the demand for offshore contract drilling market over the forecast period in European region.
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