Drilling and Completion Fluids Market - Growth, Trends, and Forecasts (2020 - 2025)
The drilling and completion fluids market is expected to register a CAGR of over 5% during 2020 2025. Factors, such as increase in the number of drilling operations in Europe, North America, and Middle East are expected to drive the demand for the drilling and completion fluids market. Additionally, development of shale and deepwater and ultradeepwater fields is expected to drive the market for drilling and completion fluids. However, the volatile oil prices over the recent period, owing to the supplydemand gap, geopolitics, and several other factors, are restraining the market’s growth.
The onshore segment accounted for the maximum market share in the market in 2018. Onshore drilling encompasses all the drilling sites located on dry land and accounts for 70% of the global oil production.
· With wells being drilled farther away from land and into the sea, primarily drilled deeper than before, there is an increasing demand for drilling and completion fluids. The total rig count increased by 18% from 933 in beginning of 2017 to 1,104 by the end of 2019. During the same period, the offshore rig count increased by 24% from 206 to 257.
· North America is the largest market for drilling and completion fluids, accounting for over 40% of the market share. Moreover, it is expected to be the fastest growing market over the forecast period mainly due to the development of shale plays.
Key Market Trends
Onshore to Dominate the Market
Onshore drilling encompasses all the drilling sites located on dry land and accounts for 70% of the global oil production. Onshore drilling is similar to offshore drilling but without the difficulty of deep water between the platform and the oil.
· The demand for oil and gas has always been increasing, and this resulted in an increase of drilling activities around the world in an effort to discover new fields. This, in turn, resulted in an increase in the demand for drill collars.
· Currently, the wells are being drilled deeper, and they are more complex than before. This is expected to drive the drill collar market’s growth.
· In 2019, ONGC announced that it allotted INR 6,000 crore for drilling 200 wells over the next seven years in Assam, to increase the output from the state. The wells are expected to be drilled during the next seven years.
· Hence, new investment in the onshore oil and gas industry, increasing exploration of unconventional resources, and the crude oil price stability are expected to increase the demand for drill collar across the world.
North America to Dominate the Market
· North America is expected to dominate the drilling and completion fluids market, and it is expected to witness significant growth over the forecast period.
· In North America, the offshore oil and gas projects are becoming more competitive, owing to improving efficiencies and tightening of the supply chain, which led to declining costs of offshore drilling. For example, prior to 2014, a deepwater well in the Gulf of Mexico used to cost about USD 200 million to drill. As of 2017, drilling a deepwater well in the same region costs between USD 1050 million.
· In terms of policy support, 2017 witnessed some positive developments. The tax overhaul plan drastically increased the fiscal competitiveness of the offshore projects in the Gulf of Mexico, relative to other offshore basins. Additionally, the Trump administration announced to uplift the ban on offshore drilling off the coasts of Florida and California. The administration is considering more than 40 sites for the leasing of natural gas and oil production.
· Furthermore, the recent development of shale plays, horizontal drilling, and fracking resulted in a massive increase in the demand for drilling and completion fluids in the country.
· Therefore, factors, such as rising offshore oil and gas investments, along with the development of shale plays in the region, are expected to drive the drilling and completion fluids market’s growth over the forecast period.
The drilling and completion fluids market is moderately fragmented, with numerous small and big companies operating in the market. The key players in this market include Schlumberger Limited, Baker Hughes Company, Halliburton Company, CES Energy Solutions Corp., Tetra Technologies and Scomi Energy Services BHD, among others.
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