Offshore Drilling Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Offshore Drilling Market is segmented by Type (Jackups, Semisubmersible, Drill Ships, and Other Types), Depth (Shallow Water and Deepwater and Ultra-deepwater), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa).

Market Snapshot

offshore drilling market
Study Period: 2018-2025
Base Year: 2021
Fastest Growing Market: Middle-East and Africa
Largest Market: North America
CAGR: >1 %
offshore drilling rigs market growth

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Market Overview

The offshore drilling market is expected to register a CAGR of approximately around 1% during the forecast period of 2021-2026. The COVID-19 pandemic has severely affected the market due to the reduction in oil prices. The oil prices plunged to negative for the first time in history, which led to major offshore projects being unviable. However, the increasing growth of the world, coupled with the artificial supply shortage created by OPEC+ countries, is picking up the prices of crude oil, thus, making offshore drilling more profitable. This may aid in the growth of the market. Factors such as improved viability of deepwater and ultra-deepwater projects are likely to drive the offshore drilling market during the forecast period. However, the volatility in crude oil is expected to restrain the growth of the offshore drilling market in the coming years.

  • The deepwater and ultra-deepwater segment is expected to witness significant development due to the increasing technological innovation and the rising viability of such operations.
  • Middle-East and Africa is expected to be one of the potential markets, with most of the demand coming from Nigeria, Angola, and Egypt.

Scope of the Report

The offshore drilling market report includes:

Type
Jackups
Semisubmersible
Drill Ships
Other Types
Depth
Shallow Water
Deepwater and Ultra-deepwater
Geography
North America
Europe
Asia-Pacific
South America
Middle-East and Africa

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Key Market Trends

Deepwater and Ultra-deepwater Segment to Dominate the Market

  • From 2014 to 2019, global deepwater expenditure increased.
  • In the southern hemisphere, a new exploration permit was awarded in April 2019 by the Argentine government to the consortium formed by ExxonMobil and Qatar Petroleum for exploration in Malvinas Oeste Basin. Moreover, 13 companies offered approximately USD 995 million for exploration licenses of areas within the Austral, Argentina Norte, and Malvinas Oeste basins. All three basins are offshore, combining a total tendered area of more than 200,000 sq. km.
  • In 2019, Argentina’s neighboring country, Brazil, held its sixth successful oil and gas bid round in just over a year and awarded all four blocks in the prospective pre-salt area for BRL 6.82 billion. The latest investment and upcoming projects in deepwater are likely to drive the growth of the deepwater drilling market during the forecast period in the South American region.
  • Moreover, the recent waves of cost reductions and critical technological breakthroughs have enabled many oil and gas exploration and production companies to expand their portfolio of sustainable deepwater developments.
  • Therefore, with the increase in deepwater activities and the technology breakthrough, the deepwater segment may grow during the forecast period.
offshore drilling industry

Middle-East and Africa to Witness a Significant Growth

  • Many countries in Middle-East and Africa have a large-scale offshore reserve of oil and gas. The world’s largest gas field, the South Pars Gas Complex in the Persian Gulf, and the new discoveries of oil and gas reserves in the eastern Mediterranean sea are all expected to aid the growth of the market.
  • The Angolan offshore is among the most prospective plays in Africa and continues to draw high levels of investment. Drilling results are broadly positive, with exploration yielding several high-impact discoveries in recent years. In January 2020, Eni started the production at the Agogo-1 deepwater field and won exploration rights to Block 28 in the Namibe Basin, while Total, active in Angola for more than 60 years, was awarded Block 29.
  • On the flipside, with Angola’s most prospective acreage in the deepwater, ultra-deepwater, and pre-salt areas, exploration can be characterized as high-risk and high-reward. The bulk of drilling is expected to continue to target deepwater and pre-salt prospects, spearheaded by industry giants, such as Chevron, BP, Eni, Exxon Mobil, Statoil, and Total, along with the national oil company, Sonangol.
  • Nigeria holds the top position among the ten countries, with the largest remaining crude oil and condensate deepwater reserves. The majority of reserves are along the country's Niger River Delta and offshore in the Bight of Benin, the Gulf of Guinea, and the Bight of Bonny. Exploration activities are mostly focused on the deep and ultra-deep offshore, although some onshore exploration is also taking place.
  • Production of oil in the country decreased, by 1.9%, to 33.6 million metric ton, in 2019, from 34.2 million metric ton, in 2018. The consumption of oil in the country decreased, by 1.7%, to 34.7 million metric ton, in 2019, from 35.3 million metric ton, in 2018. The decrease in production and consumption is expected to restrain the growth of the market.
  • Therefore, factors, such as upcoming offshore E&P activities, especially in the West African region, are expected to boost the number of offshore drilling in the region in the coming years.
drilling industry outlook

Competitive Landscape

The offshore drilling market is partially fragmented. Some of the key players in the market include Baker Hughes Company, Haliburton Company, Schlumberger Limited, Transocean Limited, and Saipem SpA.

Recent Developments

  • Neptune Energy Norge extended Odfjell Drilling/CIMC Raffles’ contract for the semisubmersible. The rig may drill an additional two wells, keeping it occupied through 2021. It may work in the area of Neptune’s 2020 Dugong oil discovery in the Norwegian North Sea. There is an option for Neptune to operate eight wells under the current contract.
  • In January 2021, the US President Joe Biden temporarily halted the drilling on federal lands, leaving the vast majority of the US crude production untouched. It may act as a major blow for the prospects of the Gulf of Mexico’s already dwindling output.
  • In February 2021, Egypt launched a bid round inviting potential companies for oil and natural gas exploration and exploitation in 24 blocks. The blocks are established in the Eastern Mediterranean.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Market Size and Demand Forecast in USD billion, until 2026

    3. 4.3 Historic and Demand Forecast of Offshore Drilling Rigs in Numbers, until 2020

    4. 4.4 Historic and Demand Forecast of Offshore CAPEX in USD billion, by Region, till 2026

    5. 4.5 Key Projects Information

      1. 4.5.1 Existing Projects

      2. 4.5.2 Planned and Upcoming Projects

    6. 4.6 Recent Trends and Developments

    7. 4.7 Government Policies and Regulations

    8. 4.8 Market Dynamics

      1. 4.8.1 Drivers

      2. 4.8.2 Restraints

    9. 4.9 Supply Chain Analysis

    10. 4.10 Porter's Five Forces Analysis

      1. 4.10.1 Bargaining Power of Suppliers

      2. 4.10.2 Bargaining Power of Consumers

      3. 4.10.3 Threat of New Entrants

      4. 4.10.4 Threat of Substitutes Products and Services

      5. 4.10.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Type

      1. 5.1.1 Jackups

      2. 5.1.2 Semisubmersible

      3. 5.1.3 Drill Ships

      4. 5.1.4 Other Types

    2. 5.2 Depth

      1. 5.2.1 Shallow Water

      2. 5.2.2 Deepwater and Ultra-deepwater

    3. 5.3 Geography

      1. 5.3.1 North America

      2. 5.3.2 Europe

      3. 5.3.3 Asia-Pacific

      4. 5.3.4 South America

      5. 5.3.5 Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Strategies Adopted by Leading Players

    3. 6.3 Company Profiles

      1. 6.3.1 Baker Hughes Company

      2. 6.3.2 China National Offshore Oil Corporation

      3. 6.3.3 China Oilfield Services Ltd

      4. 6.3.4 Exxon Mobil Corporation

      5. 6.3.5 Halliburton Company

      6. 6.3.6 Maersk Drilling AS

      7. 6.3.7 Saipem SpA

      8. 6.3.8 Schlumberger Limited

      9. 6.3.9 Transocean Limited

      10. 6.3.10 Weatherford International PLC

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Offshore Drilling Market market is studied from 2018 - 2025.

The Offshore Drilling Market is growing at a CAGR of >1% over the next 5 years.

Middle-East and Africa is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

Baker Hughes Company , Haliburton Company , Schlumberger Limited , Transocean Limited , Saipem SpA are the major companies operating in Offshore Drilling Market.

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