Drilling Fluids Market Size, Share & Trends Analysis Report By Application (Onshore, Offshore), By Fluid System (Water-based System, Oil-based System, Synthetic-based System, Others), By Well Type (Conventional Wells, High-pressure High Temperature (HPHT) Wells) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global drilling fluids market size was valued at USD 7.7 billion in 2021, and it is anticipated to reach USD 11.29 billion by 2030 at a CAGR of 4.34%.

The process of creating a borehole in the ground is facilitated by using drilling fluid, also known as drilling mud. The extraction of oil and gas, core sampling, and other activities all require the drilling of boreholes. Drilling fluids carry out a variety of tasks, including regulating formation pressures, removing cuttings from the wellbore, sealing permeable formations encountered during drilling, cooling, lubricating the bit, supplying hydraulic energy to the downhole bit and equipment, and ensuring wellbore stability and well control.

As a result of an increase in investments in the exploration and production of offshore oil and gas, it is anticipated that the global drilling fluids market share will expand at a respectable rate between 2022 and 2030. The expansion of oil and gas exploration in shale formations has inspired several nations to develop their unconventional gas resources globally. Companies are also developing more durable drill pipes, in addition to the advancements, they have made in drilling fluids. When drilling in oil fields, a drill pipe is an essential piece of equipment to have. Drill pipes are used in a variety of environments and are subjected to a wide range of loads while they are in operation.

Market Dynamics

Global drilling fluids market drivers

Increasing oil and gas exploration activities globally to support economic development

The robust increase in the demand for oil and gas has ushered in a significant new potential for well drilling activities all over the world, which will, in turn, drive the drilling fluids market growth. After Russia and Saudi Arabia, North America has the highest production rate for crude oil derived from offshore resources. Russia holds second place. In addition, numerous nations worldwide are currently investing in the exploration of untapped oil and gas reserves. For instance, on April 14, 2021, the GOM announced two new crude oil production projects. Together, these projects account for 200,000 barrels per day, equivalent to 12% of the total oil production in the Gulf of Mexico. This massive project has forecasted increased crude oil production in the federal Gulf of Mexico (GOM).

The growing demand for shale gas is expected to fuel market expansion.

The expanding demand for gas-fired power generation technology and the increasing emphasis on lowering carbon emissions are two of the various factors driving the expansion of the worldwide shale gas market. Shale gas exploration is a priority industry for the national economies of several nations globally, including Germany, Canada, and India. As predicted by the International Energy Agency (IEA), the percentage of natural gas in the global energy mix would rise from 23% to 25% by 2035, overtaking coal's present share of 24%, making it a more important primary energy source than oil (IEA).

Shale gas is being used more frequently in electricity production in the United States, which is a good thing for several reasons. Gas-fired generation in the United States is expected to expand by 3% by 2020. In July 2020, the percentage of electricity generated in the United States from shale gas hit 45%. This aspect is projected to drive the market for shale gas, which is expected to boost the drilling fluids market demand worldwide.

Global drilling fluids market opportunities

Drilling operations in deepwater and ultra-deepwater are receiving increased attention.

As a result of recent discoveries made in Latin America, West Africa, and the Asia-Pacific region, deepwater and ultra-deepwater drilling activity is anticipated to rise in the foreseeable future. Deepwater regions such as those found in Angola, the United States, Brazil, Nigeria, Malaysia, and Norway are where most offshore activity is concentrated. Recent discoveries in emerging frontier regions, such as the east coast of Africa, the eastern Mediterranean Sea, and the west coast of Australia, will significantly accelerate the growth of offshore reserves. It is because these locations are rich in natural resources.

Global drilling fluids market restraints

The environmental impact of drilling fluids will limit market growth

During down-hole injection and onshore disposal, these fluids produce harmful compounds. The groundwater quality is lowered when certain substances are dissolved in it. These wastes and wastewater enter the environmental cycle, severely pollute the soil, disrupt marine ecosystems, and harm marine aquatic life. During the anticipated era, this factor will probably hurt the global market.

Several government bodies have put strict rules on drilling chemicals to prevent the harmful effects of fluid on health, safety, and the environment. As an illustration, the U.S. Environmental Protection Agency (EPA) published recommendations for the oil and gas extraction industry on June 4, 2001. The effluent guidelines define technologically-based, economically feasible limits and new source performance standards (NSPS) for releasing pollutants into the water from oil and gas drilling operations related to the use of synthetic-based fluids and other non-aqueous fluids.

Regional Analysis

According to region, the global drilling fluids market is segmented into North America, Europe, Asia-Pacific and LAMEA based on region. North America dominated the market.

As a result of an increase in the amount of shale gas being explored in Canada and the United States, it is anticipated that North America will control the drilling fluids market on a global scale. In the not-too-distant future, it is projected that Latin America will expand significantly. It is projected that the demand for drilling fluids in the region will increase due to increased drilling activity in the offshore areas of Venezuela and Brazil.

It is anticipated that government support and subsidies for exploration and production companies in developing economies like India and China to enhance oil and gas production will increase the demand for drilling fluids in the Asia-Pacific region. These developing economies include China and India.

Segmental Analysis

The global drilling fluids market is segmented into four parts based on application, fluid system, well type, and region. 

Further, based on application, the market is bifurcated into Onshore and Offshore. The onshore segment dominated the market, which is expected to expand at the fastest rate throughout the forecast period. It is attributed to an increase in drilling and completion fluid demand, which is expected to provide lucrative opportunities for the growth of the global market during the forecast period, as well as an increase in the demand for crude oil from developing economies and onshore exploration activities.

Based on fluid systems, the market is classified into Water-Based Systems, Oil-Based Systems, Synthetic-Based Systems, and Others. The water-based category held market dominance. Because they are more affordable and have a minor negative impact on the environment when cuttings and mud are discharged, water-based fluids are in high demand.

The market is bifurcated into Conventional Wells and High-Pressure, High Temperature (HPHT) Wells. Due to increased exploration efforts and the widespread distribution of HPHT wells, the high-pressure high-temperature (HPHT) well category held the largest market share. Additionally, the market is anticipated to rise in the following years due to increased awareness of the importance of careful planning and management operations in HPHT wells.

Recent Developments

• In March 2022, NOV and Chevron announced a joint development agreement aimed at increasing the effectiveness of offshore processing.
• In May 2022, Halliburton Company and Aker BP, a Norwegian oil and gas exploration and production company announced a collaboration to create next-generation field development planning software.
• In March 2022, Weatherford International plc ("Weatherford" or the "Company") announced that its Memory Raptor cased-hole evaluation system had received an Offshore Technology Conference Asia (OTC Asia) Spotlight on New Technology award for OTC Asia 2022 Exhibitors.