Offshore Drilling Market: Information by Services (Contract Drilling), Platform (Jack-up Rigs, Floating), Water Depth (Shallow, Deep, Ultra-deepwater), and Region — Forecast till 2029

Offshore drilling uses a fixed or mobile platform positioned off the coast, in the shelf, and deepwater regions to extract petroleum and natural gas from the seabed. This offshore drilling market report includes the insights of some platforms used in offshore drilling and the various types of servic...
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Market Snapshot
Study Period:
2017-2029
Base Year:
2021
Fastest Growing Market:
Asia Pacific
Largest Market:
Asia Pacific
CAGR:
4.6 %
Key Players

Offshore drilling uses a fixed or mobile platform positioned off the coast, in the shelf, and deepwater regions to extract petroleum and natural gas from the seabed. This offshore drilling market report includes the insights of some platforms used in offshore drilling and the various types of services offered by them, such as directional drilling, logging while drilling (LWD), and measurement while drilling (MWD). In 2019, the global offshore drilling market valued at USD 102,166.4 million and is estimated to reach USD 187,141.2 million by 2029.

Market Drivers

Increasing Number of Drilling and Well-Intervention Activities Worldwide

The oil and gas sector witnessed a decline between 2015–2016 due to high production costs and low oil prices during petroleum exploration. However, in recent years, the rising oil prices and substantial investment initiatives have resulted in prominent growth. This gaining momentum in the oil and gas industry increased the drilling and well intervention activities leading to offshore drilling market growth.

The adoption of industry 4.0 technologies, such as AI, machine learning, and artificial neural networks have further enabled the drilling operators to increase efficiency and advance the supply chain perspective on drilling sites, which is expected to expand the drilling operations. Though the U.S. shale production has been a crucial driver for the last few years, the rising drilling activities across the markets of Brazil, South Africa, Venezuela, and Southeast Asia are anticipated to boost the market growth during the forecast period. For instance, Transocean has been awarded new rig contracts and extensions worth USD 352.9 million for its ultra-deepwater drilling services. Likewise, Petronas got awarded with an ultra-deepwater contract worth USD 140,000 for Deepwater Nautilus offshore Malaysia.

Technological Advancements Increase Exploration Activities in Deep and Ultra-Deepwater

Technological advancements in offshore drilling, such as customized subsea processing and unmanned tiebacks, FLNG technology, and drilling equipment have improved oil exploration and production in deep, ultra-deepwater, and harsh-environment offshore fields of the arctic regions.

Additionally, in recent years, the oil and gas industry has reduced offshore development and production costs by 30% to 40% by improving the supply chain and enhancing their design concepts. This development in offshore exploration has inclined the exploration and drilling companies to invest in offshore exploration for oil and gas production. For instance, in April 2019, Shell announced the oil discovery at the Blacktip prospect in the deepwater Gulf, located in Alaminos Canyon block 380 in about 1,890 m of water.

Segmental Outlook

By Services

Contract Drilling

The contract drilling segment is anticipated to account for the largest market share during the forecast period. In offshore drilling, a significant amount of revenue comes from the maintenance and services offered by drilling companies during the drilling and intervention activities. As the name suggests, contract drilling is a contract/agreement signed by a drilling company for the preparation of a well for production. These contracts can entail running production casing, stimulation work, and zonal isolation to allow the well to flow. Transocean, Maersk Drilling, and Ensco are some of the well knows offshore drilling contractors in the market.

By Platform

Jack-Up Rigs

The jack-up rigs segment dominated the market in 2019 contributing to 54.4% of the global market share. It is expected to register the highest CAGR during the forecast period. Jack-up rigs are mobile, self-elevating drilling platforms that consist of a floating hull fitted with three to four legs movable legs, capable of securing and raising its hull over the ocean floor, after reaching the desired location.

Jack-up rigs are often used for shallow wells owing to the structural stability concerns in deepwater. However, the technological advancement in drilling equipment has improved their capabilities, providing the ability to drill in deepwaters as well.

Floating

The floating segment contributed to the second-largest market share in 2019 and is estimated to record the fastest CAGR of around 6.7% during the forecast period. The floating segment includes the semi-submersible platforms and drillships that have witnessed a significant demand in recent years owing to the increase in ultra-deepwater drilling activities. It is used for drilling, processing, and storing oil and gas, and can operate in water depths up to 12,000 ft.

Semi-submersible platform is mobile offshore drilling unit (MODU), which is designed for offshore drilling in ultra-deepwaters. These platforms are partially submerged in water during drilling operations and are normally moored to the seabed by anchors.

Drillships are the fastest-growing platforms in the floating segment. These are marine ships fitted with drilling equipment and the dynamic positioning system, which maintain their positions over an oil well. They are used for exploratory drilling and operate in ultra-water depths. In recent years, drillships have become prevalent owing to the ability to operate from remote locations faster and with fewer supply trips. Also, the mobility and water depth capabilities of these ships are higher than semi-submersible rigs. However, they are less stable than the average semi-submersible.

By Water Depth

Shallow

The shallow segment accounted for the largest market share with a valuation of USD 74,702.8 million in 2019. The depth of the shallow water is less than 200 meters. The segment holds the largest market share contributing to almost 89% of the global share in 2019 as they are relatively less expensive and technically less challenging for operators to explore and drill. However, the changing economy and depleting shallow offshore resources incline the operators to shift from shallow water depths to deep-water and ultra-deepwaters.

Ultra-Deep

The ultra-deepwater depths range above 1000 meters. The increasing environmental concerns regarding drilling onshore or on shallow water depths have inclined the operators towards ultra-Deepwater depths. The advancements in drilling technology, dynamic positioning equipment, and floating production and drilling units have further supported this shift in exploration activities from shallow waters to ultra-deepwaters. However, the high capital investments for drilling in ultra-deepwater are still a concern for operators that are expected to hinder the segmental growth. The markets of Brazil and the United States together account for more than 80% of global ultra-deepwater production.

Regional Outlook

Asia-Pacific

The Asia-pacific market accounted for the largest market share in 2019 and is expected to reach USD 63,941.3 million by 2029 with the fastest CAGR. The rapid infrastructure development, increasing drilling and well-intervention activities and technological advancements are some of the key factors favoring the growth of the oil and gas industry in the regional market.

Asia-Pacific is a highly-populated and one of the fastest-growing regional markets in the world due to the high energy demand. As energy generation through renewable resources is still in a burgeoning stage, Asia-Pacific meets its energy demand through fossil fuel consumption. The rising population and the resulting rise in energy demand are anticipated to propel the market growth during the forecast period.

The increasing investment by prominent oil and gas industry players to obtain higher energy outputs and reduce the dependency on oil imports from foreign countries is further anticipated to fuel the market growth. For instance, in China, PetroChina, Sinopec, and China National Offshore Oil Corporation (CNOOC) are planning to spend USD 77 billion to boost outputs from old fields. Also, Japanese corporations, such as INPEX and JAPEX are increasing their focus on the LNG-driven business model, Floating Liquefied Natural Gas (FLNG) projects, and domestic pipeline business, which in turn, are anticipated to support the offshore drilling market growth.

Key Players

  • Halliburton Energy Services, Inc
  • Schlumberger Limited
  • Weatherford International Ltd
  • Baker Hughes, a GE company LLC
  • China Oilfield Services Limited
  • VALLOUREC
  • Nabors Industries Ltd
  • National Oilwell Varco
  • Tenaris S.A.
  • Frank’s International N.V

Offshore Drilling Market: Segmentation

By Services

  • Contract Drilling
  • Directional Drilling
  • Logging While Drilling
  • Measurement While Drilling

By Platform

  • Jack-up Rigs
  • Floating
    • Semi-Submersible Platforms
    • Drill Ships
  • Others

By Water Depth

  • Shallow
  • Deep
  • Ultra-deepwater

By Region

  • North America
    • The U.S.
    • Canada
    • Mexico
  • Europe
    • The U.S.
    • Germany
    • Italy
    • Norway
    • The U.K.
    • The The Netherlands
    • Denmark
    • Romania
    • The Rest of Europe
  • Asia-Pacific
    • China
    • India
    • Indonesia
    • Australia
    • Malaysia
    • Vietnam
    • The Rest of Asia-Pacific
  • Central and South America and the Caribbean
    • Brazil
    • Argentina
    • Venezuela
    • The Rest of Central, South America, and the Caribbean
  • The Middle East
    • Saudi Arabia
    • Kuwait
    • Bahrain
    • The UAE
    • Turkey
    • Rest of the Middle East
  • Africa
    • Angola
    • South Africa
    • The Rest of Africa

Frequently Asked Questions (FAQs)

Contract Drilling Service Segment is expected to be the leading segment in Offshore Drilling Market during the forecast period.
Asia Pacific is expected to hold the highest market share in Offshore Drilling Market.
Halliburton Energy Services, Inc, Schlumberger Limited, Weatherford International Ltd, Baker Hughes, a GE company LLC, China Oilfield Services Limited, VALLOUREC, Nabors Industries Ltd, National Oilwell Varco, Tenaris S.A. are the top players in Offshore Drilling Market.
The global offshore drilling market valued at USD 102,166.4 million and is estimated to reach USD 187,141.2 million by 2029.
The rising adoption of industry 4.0 technologies, Technological advancements in offshore drilling, rapid infrastructure development, increasing drilling and well-intervention activities are the key factors expected to drive Offshore Drilling Market during the forecast period.
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