Industry Insights
The global directional drilling services market size was valued at USD 9.11 billion in 2017 and is expected to grow further over the forecast period. Rising concerns regarding optimizing production and maximizing recovery are expected to upscale the demand for directional drilling services. Furthermore, increasing demand from energy sector, owing to the ongoing shale gas developments and discoveries of new oilfields, is expected to contribute significantly to the market growth.
Global directional drilling services market revenue, by application, 2015 - 2025 (USD Billion)
Rising demand for energy due to rapid urbanization and industrialization, has led companies to explore large drilling areas to maximize production activities. These trends have augmented the demand for directional drilling services over the past few years. Technological developments have also resulted in an increased market for horizontal drilling services.
For instance, in 2014 Mark Bland, President of Directional Instructional Services estimated that approximately 70% of drilling activity in Permian Basin was using horizontal directional drilling owing to the advancement in laterals that extend from 5,000 to 10,000 feet. Rise in returns by 15% to 20% have resulted in an increased adoption of horizontal drillings and is expected to open new avenues for the directional drilling services over the next few years.
On the other hand, fluctuating oil prices may hinder the market growth. However, gains from the industrial sector are expected to result in an increased demand for oil and gas industry, which, in turn, will propel the directional drilling services market demand over the forecast period.
Segmentation by System
• Conventional
• Rotary Steerable System (RSS) & others
The Rotary Steerable System (RSS) is estimated to account for the largest market share during the forecast years. The RSS facilitates continuous adjustment in desired direction. The continuous orientation is expected to result in varied benefits including cost-effectiveness, improved drill performance, and reduction in well bore and nonproductive time and will drive the usage of RSS.
Segmentation by Technology
• Logging While Drilling (LWD)
• Measurement-While-Drilling (MWD) & Survey
• RSS
• Motors
The MWD and survey is expected to gain momentum owing to the real-time information provided to help in steering the drill, which helps overcome the extreme angle drilling challenges faced earlier. Moreover, increased use of magnetometers, gyroscopes, and accelerometers to determine drill bit information, wellbore position, and directional data in real-time is expected to result in the market growth.
Segmentation by Application
• Onshore
• Offshore
Over the past few years, the onshore sources have been witnessing depletion. For instance, the Cantarell oil field was the largest contributor to the worldwide production and accounted for 45% of the overall production till 2004. However, the supply began to deplete from 2004. The scope of onshore drilling services is expected to account for around 70% of the global market by the end of 2025.
Increasing spending on E&P for offshore areas are expected to propel the demand for the directional drilling services market. For instance, more than 75 shelf discoveries are made in Norwegian shelf, out of which, five have started operations from 2017. In addition, 10 projects are currently under development. In 2016, 34 explorations were completed where the wells were offshore drilled including Barents Sea, North Sea, and Norwegian Sea.
Increasing spending on exploration of undiscovered resources is expected to increase the market demand in the years to come. Furthermore, heavy investments for drillings in offshore wells of European countries are expected to have a positive impact on the market. For instance, Premier and its partner Dana Petroleum have undertaken the development of southern North Sea-based Tolmount Main gas field in U.K.
Segmentation by Region
• North America
• Europe
• Asia Pacific
• Central & South America
• Middle East & Africa
North America accounted for more than 30% of the total market share in terms of revenue in 2017 and is projected to grow on account of positive outlook towards upstream petroleum sector in U.S. and Canada. Furthermore, the expected rise in U.S. oil production of up to 10 million barrels per day in 2018 is projected to drive the regional market.
U.S. has surpassed Russia and Saudi Arabia in global crude oil production and is expected to maintain the trend over the forecast period. This, in turn, is anticipated to result in a rise in drilling activities in North America in the forthcoming years.
Competitive Landscape
Some of the key companies in the directional drilling services industry include Baker Hughes Inc.; Halliburton Company; Weatherford International PLC; GE Oil & Gas; National Oilwell Varco, Inc.; Nabors Industries Ltd.; Jindal Drilling & Industries Ltd.; Gyrodata Inc.; and Schlumberger Ltd. These companies focus on efficient operations through the adoption of new technologies, such as MWD.
Increasing spending on automation in the process as a result of implementation of drilling bit guidance system is expected to drive the market. For instance, Motive Drilling Technologies, Inc. uses automated decision-making at rig and also delivers 2D and 3D data for improved operational transparency.
