The global managed pressure drilling market size was valued at USD 2.8 billion in 2023. It is projected to reach from USD 2.9 billion in 2024 to USD 4.5 billion by 2032, registering a CAGR of 5.4% during the forecast period (2024-2032).
Managed Pressure Drilling (MPD) is a sophisticated drilling technique used in the oil and gas industry to control wellbore pressure precisely throughout the drilling process. Unlike traditional drilling methods, which rely on maintaining constant bottom hole pressure, MPD allows for dynamic pressure adjustment in response to changing downhole conditions. This allows operators to mitigate drilling challenges like kicks, losses, wellbore instability, and formation damage.
The global Managed Pressure Drilling (MPD) market is experiencing significant growth and is expected to expand rapidly in the coming years. The increasing demand for energy resources, combined with the exploration of unconventional oil and gas reserves, drives the global adoption of MPD techniques. Furthermore, the increasing complexity of drilling operations, deepwater and ultra-deepwater exploration activities, and the need for efficient well control mechanisms are propelling the market forward. The market is also seeing advances in MPD equipment and technologies, such as the development of advanced sensors, control systems, and real-time data analysis tools, which are helping to drive its growth. Furthermore, rising investments in offshore drilling projects and unconventional resource exploration in regions such as North America, Europe, and Asia-Pacific will create lucrative opportunities for market players.
Highlights
The complexity of drilling environments drives the adoption of Managed Pressure Drilling (MPD) techniques in the oil and gas industry. As exploration and production activities expand into more difficult geological formations, such as deepwater reservoirs and unconventional plays, more than traditional drilling methods may be needed for maintaining wellbore integrity and controlling formation pressure. Deepwater exploration is a complex drilling environment in which operations are carried out at depths greater than 500 meters. Deepwater reservoirs frequently present unique challenges, such as high-pressure formations, narrow pressure margins, and unstable formations susceptible to kicks and losses. In such environments, MPD techniques provide precise control, which is critical for maintaining well control and avoiding costly drilling incidents.
Furthermore, the development of unconventional resources has altered the global energy landscape, particularly in regions such as North America. According to the United States Energy Information Administration (EIA), shale gas production in 2023 will account for 77% (29.35 trillion cubic feet) of the country's total dry natural gas output. As operators expand their footprint in unconventional plays worldwide, there is an increasing demand for MPD techniques to overcome drilling challenges.
Moreover, non-OPEC deepwater production is expected to increase by about 500,000 barrels per day, or 7%, in 2023 compared to the previous year. By 2026, Rystad expects offshore deepwater to replace shale as the most significant growth segment, remaining the key growth driver until the end of the decade. For example, the Gulf of Mexico is expected to experience a substantial increase in deepwater drilling activity, with several major projects planned or underway. The International Energy Agency (IEA) predicts deepwater production will account for an increasing global oil and gas output share, particularly as conventional reserves decline and operators shift to offshore resources. As a result, the complexity of drilling environments, as demonstrated by the challenges presented by deepwater and HP/HT formations, is a crucial motivator for using Managed Pressure Drilling techniques.
Regulatory and permitting issues are a significant barrier to adopting Managed Pressure Drilling (MPD) techniques in the oil and gas industry. Compliance with regulatory standards and obtaining required permits can be complex and time-consuming, impeding the implementation of MPD projects. Countries and regions have different regulatory frameworks governing drilling operations, such as sound control, environmental protection, and safety standards. For example, the regulations established by the United States Bureau of Safety and Environmental Enforcement (BSEE) for offshore drilling in the Gulf of Mexico may differ from those established by the Norwegian Petroleum Safety Authority (PSA) for operations in the North Sea.
Furthermore, regulatory requirements for drilling operations, including MPD techniques, can change over time as safety standards, environmental regulations, and industry best practices evolve. Operators must stay current on regulatory updates and ensure compliance with new requirements, which may necessitate changes to existing drilling plans and procedures. Furthermore, operators must keep detailed records of environmental compliance and regulatory approvals for all drilling activities, including MPD operations. These records indicate adherence to regulatory standards and may be audited or inspected by regulatory agencies to ensure permit compliance.
As offshore exploration expands into deeper waters and more challenging environments, there is an increasing demand for innovative drilling solutions such as MPD. Deepwater and ultra-deepwater reserves contain significant untapped hydrocarbon potential, and MPD techniques can help operators overcome the technical challenges of drilling in these environments. Brazil's pre-salt basins, located offshore in ultra-deepwater environments, are one of the most promising areas for deepwater exploration. These reservoirs, buried beneath thick layers of salt and rock at depths of up to 7,000 meters below sea level, contain massive amounts of hydrocarbons. For example, Rystad Energy predicts that global deepwater drilling expenditure will exceed USD 50 billion by 2025, owing to continued investment in frontier exploration projects and the development of existing discoveries.
According to industry reports, there is a growing trend toward ultra-deepwater drilling projects, particularly in regions with significant offshore reserves, such as the Gulf of Mexico, West Africa, and Asia-Pacific. These projects involve drilling in water depths greater than 1,500 meters and targeting reservoirs at extreme depths beneath the seabed. As operators move into deeper waters and more difficult geological formations, there is an increasing demand for advanced drilling techniques that can handle the technical complexities of deepwater and ultra-deepwater exploration. Managed Pressure Drilling provides benefits regarding wellbore stability, formation control, and safety, making it an appealing option for operators operating in these challenging environments.
| Study Period | 2020-2032 | CAGR | 5.4% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD 2.8 billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD 4.5 billion |
| Largest Market | North America | Fastest Growing Market | Asia-Pacific |
North America is the most significant global market shareholder, estimated to grow at a CAGR of 5.3% over the forecast period. According to the United States Energy Information Administration, shale gas will supply half of the country's domestic gas by 2035. The number of unconventional natural gas wells in the country is expected to increase until 2040 as companies continue to invest despite rising oil and gas prices. This is a significant reason for the rising demand for regional drilling services, including managed pressure drilling.
On the other hand, Canada is expected to increase the proportion of tight and shale gas in its natural gas production. The Canada Energy Regulator predicts that by 2035, tight and shale gas production will account for 80% of Canada's natural gas production. Apart from shale gas, the region is seeing a significant increase in offshore drilling activity. In January 2020, the Canadian government approved three offshore drilling projects in the Atlantic Ocean planned by BHP, Equinor, and Chevron.
Asia-Pacific is anticipated to exhibit a CAGR of 5.9% over the forecast period, owing to the region's abundance of undiscovered reserves. The area is one of the most promising markets with a positive outlook. The demand for hydrocarbons is constantly increasing due to massive infrastructure demand, demographic growth, and the expansion of the aeronautical and maritime industries, among other factors. India and China invest heavily in discovering oil and gas reserves to meet the massive demand for both.
Similarly, the Kaiping South Oilfield is located in the eastern South China Sea, with an average depth of around 500 meters. The new reserve will add at least 100 million tons of oil equivalent proved in-place volume and is a significant discovery for the country. The main oil-bearing plays in the Paleogene are the Zhuhai Formation, Enping Formation, and Wenchang Formation, which have light crude oil properties. Furthermore, the annual increase in drilling to meet the exponential hydrocarbon demand is expected to stimulate the market.
The Middle East and Africa has significant market potential to explore the untapped capacity of developing hydrocarbons and non-complex formations to effectively drill wells, which will drive the growth of the drilling services market in the coming years. Countries in the Middle East and Africa, including the United Arab Emirates, Saudi Arabia, Kuwait, Bahrain, and others, are members of the Organization of Petroleum Exporting Countries (OPEC) and focus on meeting the organization's production targets. Other important countries involved in the regional market include Oman, Algeria, Qatar, and Nigeria.
Europe has a significant potential. Growing shale oil and gas exploration in Russia will increase demand for managed pressure drilling. It may appeal to Europe because it will provide energy security to some countries that rely heavily on Russian gas; it may also provide a cleaner fuel than coal in power plants. The most promising areas for oil exploration in Europe are the eastern Baltic, northeastern Ukraine, western Ukraine, the Balkans, central Poland, northern Germany, parts of southern Norway and Sweden, the Netherlands, northern France, and northern England. And the demand for MPD services is relatively high in those areas.
Latin America is experiencing positive growth as deep drilling activities increase in Brazil and Mexico. Brazil is the world leader in deepwater (125 to 1,500 meters) and ultra-deepwater (1,500+ meters) hydrocarbon production, surpassing Norway and the United States. We expect Brazil to maintain its high levels of offshore activity for the remainder of the decade, with nearly 600 wells scheduled to be drilled between 2024 and 2030.
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The CBHP segment has the most significant global market share, as foraging in depleted areas frequently results in narrow pressure windows and circulation issues. Forage in these areas necessitates consistent bottom-hole pressure to stay within the narrow pressure window.
Furthermore, the managed pressure drilling technique has many applications, including high-pressure and high-temperature wells, deep water drilling with lost circulation, and narrow drilling windows. CBHP offers a higher level of safety while foraging. It maintains bottom-hole pressure above pore pressure and below burst pressure by applying surface backpressure to the surface. The technique is also used to drill narrow margins, which allows for precise surface backpressure application while maintaining bottom-hole pressure.
Dual Gradient (DG) drilling is a more advanced MPD technique that uses two different fluid systems with different densities to create a dual gradient in the wellbore. DG drilling allows operators to more precisely control bottom hole pressure by independently adjusting the density of drilling fluids in the annulus and drill string, which is especially useful in deepwater and ultra-deepwater drilling. This technique has advantages in wellbore stability, kick detection, and hole-cleaning efficiency, making it ideal for difficult drilling situations where traditional methods may struggle to maintain control.
The onshore segment contributed significantly to global MPD market revenue owing to increased exploration and production activities in onshore oil and gas fields. The onshore segment accounts for 78% of worldwide oil and gas output. Onshore drilling is the exploration and production of oil and gas reserves on land. Onshore drilling operations typically involve drilling wells in land-based environments away from bodies of water. Onshore drilling locations differ significantly regarding geological formations, environmental conditions, and regulatory requirements. Managed Pressure Drilling techniques are widely used in onshore drilling to improve healthy design, control formation pressures, and reduce drilling-related risks. Onshore drilling projects can range in size from small-scale operations in remote locations to large-scale developments in established oil and gas reserves.
Offshore drilling is the exploration and production of oil and gas reserves beneath the seabed in offshore locations. Offshore drilling operations can occur in shallow waters near the shore or deepwater and ultra-deepwater environments far offshore. Offshore drilling presents distinct challenges compared to onshore drilling, such as harsh weather conditions, complex logistics, and higher operational costs. Managed Pressure Drilling (MPD) techniques are increasingly used in offshore drilling projects to improve safety, efficiency, and control. Offshore drilling projects may involve exploration wells, development wells, and production platforms, with offshore fields ranging from conventional reservoirs to deepwater and subsea formations.
