The drilling and completion fluids market is expected to grow at a CAGR of over 5% during the forecast period of 2020 – 2025. Factors such as increase in number of drilling operations in Europe, North America and Middle East are expected to help drive the demand for drilling and completion fluids market. Additionally, development of shale and deep-water and ultra-deepwater fields are expected to drive the market for drilling and completion fluids. However, the volatile oil prices over the recent period, owing to the supply-demand gap, geopolitics and several other factors has been restraining the growth in the demand for drilling and completion fluids market.
- The onshore is expected to have the maximum share in the market, in 2018. Onshore drilling encompasses all the drilling sites located on dry land and accounts for 70% of worldwide oil production
- With wells being drilled going farther away from land and into the sea and being drilled deeper than before, this have increased the demand for drilling and completion fluids. The total rig count increased by 18% from 933 in beginning of 2017 to 1104 by the end of 2019, in the same time period the offshore rig count increased by 24% from 206 to 257.
- North America is the biggest market for drilling and completion fluids, accounting over 40% of market share and is also expected to be the fastest growing market in the forecast period mainly due to 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 worldwide oil production. Onshore drilling is similar to offshore drilling but without the difficulty of deep water between the platform and the oil.
- The demand oil and gas have been on a general trend of increasing, this have resulted in an increase of drilling activities around the world in an effort to discover new fields. This in turn have resulted in an increase in demand of drilling and completion fluids.
- Almost all the easy oil being already discovered the wells now being drilled are deeper and more complex than before, also deep and ultra-deep-water drilling operations are also on the rise. Both factors have led to a growth in drilling and completion fluids market.
- Horizontal Drilling comes with a range of stability and drilling issues and requires an increase in volume of drilling fluids used and a more complex drilling fluid system.
- In 2019, ONGC announced that it had allotted INR 6,000 crore in 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, with the new investment in onshore oil & gas industry, increasing exploration of unconventional resources, and the crude oil price stability, which in turn are expected to increase the demand for drilling and completion fluids market around the globe.
North America to Dominate the Market
- North America is expected to dominate the drilling and completion fluidsmarket and to grow at a significant rate 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 has 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 10 – 50 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.
- Adding to this, the recent development of shale plays, horizontal drilling and fracking have resulted in a massive increase in demand of drilling and completion fluids in the country.
- Therefore, factors such as rising offshore oil and gas investments along with development of shale plays in the region are expected to grow the demand for drilling and completion fluids market over the forecast period.
The drilling and completion fluids market is moderately fragmented with a number of 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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