Downhole Tools Market Size & Share, by Tool Type (Handling, Flow & Pressure Control, Drilling, Impurity Control, Downhole Control); Location (Offshore, Onshore); Application (Drilling, Completion, Intervention, Formation & Evaluation) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 5022
  • Published Date: Jun 14, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023 - 2035

Downhole Tools Market size is poised to surpass USD 7 Billion by 2035, growing at a CAGR of 5% during the forecast period, i.e., 2023 – 2035. In the year 2022, the industry size of downhole tools was close to USD 4 Billion. Downhole tools play a crucial role in oil and gas production and suffice the increasing energy demand. These tools are used at various stages of production, such as improving well performance, optimizing production rates, and ensuring safe extraction.  In 2023, global oil demand is predicted to rise by 1.9 million barrels per day. Moreover, the need for crude oil and biofuels is expected to rise by around 102 million barrels per day in 2023.

Technological advancements have played a pivotal role in unlocking the potential of unconventional resources, such as shale oil and gas. Therefore, the rising demand for unconventional resources significantly augments the demand for downhole tools. Specialized downhole tools, like advanced drill bits, MWD tools, and perforating guns, are experiencing higher demand as the operators seek to maximize the production of shale gas. On the other hand, the use of downhole tools in mining and geothermal energy will also drive market growth. With the help of these tools, valuable data regarding temperature, pressure, and rock properties can be extracted. This data helps in optimizing the drilling and management of reservoirs.


Downhole Tools Market-min
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Downhole Tools Sector: Growth Drivers and Challenges

Growth Drivers

  • Increasing Drilling Activities– Downhole tools are the equipment used in oil & gas exploration, as the discovery of new wells rises the drilling activities increase.  Volumes discovered in impact wells have approximately doubled to roughly 2 billion (boe) barrels of oil equivalent. Other than oil wells, downhole tools, such as casing, screens, and drill bits are also employed in water wells. They penetrated the ground to carefully lay the casing pipes, for ensuring proper water flow.
  • Rising Trade of Oil & Gas – the growing business of oil & gas will increase the demand for oil & gas, which leads to higher productizing and higher use of equipment for evaluation and drilling of both onshore and offshore wells. In 2021, the export of oil-based products in Mexico was around 35.4 metric tonnes and it was the highest in the world.
  • Surging Development in Directional Drilling– Downhole tools, such as directional drilling involves a range of drilling tools, that are required for drilling different locations and in different direction. Therefore, significant advancement in drilling tools, such as the integration of 3D earth models, and 3D visualizations will increase their demand in the industry.

Challenges

  • High Prices of Crude Oil- Volatility in the prices of oil & gas directly impacts the production of oil & gas. Moreover, the supply chain of the oil & gas industry also gets affected. Higher prices impact the cost throughout the supply chain. The prices of raw materials, equipment, and labor everything rise, and it squeezes the profit margins of operators. The primary cause for the sudden rise in prices is geopolitical events and weather-related hazards.
  • Higher Inclination Towards Renewable Energy Sources
  • Ecological Harms Caused by Drilling

Downhole Tools Market: Key Insights

Base Year

2022

Forecast Year

2023-2035

CAGR

~5%

Base Year Market Size (2022)

~ USD 4 Billion

Forecast Year Market Size (2035)

~ USD 7 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Downhole Tools Segmentation

Tool Type (Handling, Flow & Pressure Control, Drilling, Impurity Control, Downhole Control)

The drilling segment is predicted to hold a tremendous share of about 35% and the highest revenue in the year 2035. Rising demand for drilling equipment will drive the segment gain. Leading jack-up fleet operators predict global demand for modern jack fleets to exceed 95% in the coming quarters. The demand for drilling equipment is rising due to many factors, such as growing energy demand, improved living standards, higher reliance of the transportation sector on oil & gas, and low widespread of renewable energy resources.

Application (Drilling, Completion, Intervention, Formation & Evaluation)

Downhole tools market from the drilling segment is expected to garner a notable proportion of around 40% in the year 2035. The rising discovery of liquids and gas is contributing to the segment’s expansion.  Discovered liquids make up for around 1 billion boe, or about 70% of global volumes in 2022, while the quantity of gas discovery was roughly 550 million boe. Downhole seismic tools, such as geophones, and accelerometers are used for conducting to map the subsurface geological structures before drilling. It helps in finding potential hydrocarbon reservoirs.

Our in-depth analysis of the global market includes the following segments:

     Tool Type

  • Handling
  • Flow & Pressure Control
  • Drilling
  • Impurity Control
  • Downhole Control

     Location

  • Offshore
  • Onshore

     Application

  • Drilling
  • Completion
  • Intervention
  • Formation & Evaluation

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Downhole Tools Industry- Regional Synopsis

Middle East & Africa Market Forecast

The downhole tools market in the Middle East & Africa is projected to be the largest with a share of about 31% by the end of 2035. Rising demand for equipment will drive the market extension in the region. As Saudi Arabia and the UAE invest billions to meet production capacity targets, the demand for lang rigs is expected to receive a substantial rise of 25% from 2023-2027. Furthermore, the growing demand for oil and the need to increase its production is rising the demand for such tools. For instance, downhole drill bits are used to cut through rock formations during the drilling procedure of wells.

APAC Market Analysis

The Asia Pacific downhole tools market is estimated to be the second largest, registering a measure of nearly 27% by the end of 2035. Rising investment in drilling and services, such as well intervention. To meet expanding oil & gas demand, China's national oil corporations (NOCs) are projected to invest more than USD 120 billion in drilling and well services between 2021 and 2025. With this investment, the region is likely to drill around 118,000 wells by 2025. Increased intervention allows for a greater focus on well intervention operations, such as production optimization, stimulation, and reservoir management.

North American Market Forecast

North America downhole tools market size valued at more than 2 billion in 2022. Technological advancement of machinery is going to boost the market growth in the region. The adoption of digital technologies and data analytics, such as real-time data collection, optimization, and transmission has transformed the oil & gas industry of North America.

Research Nester
Downhole Tools Market Size-min
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Top Featured Companies Dominating the Downhole Tools Landscape

top-features-companies
    • Aker Solutions ASA
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • AKITA Drilling Ltd.
    • Archer Ltd.
    • Baker Hughes Co.
    • Dril Quip Inc.
    • Halliburton Energy Services, Inc.
    • Hunting Plc
    • Innovex
    • NexTier Oilfield Services Inc.

    Tryton Tool Services Ltd.


In the News

  • Aker Solutions ASA announced the collaboration with Drill-Quip, Inc. The subsidiaries of both companies together will offer large subsea injection systems for the injection and storage of carbon dioxide.
  • Baker Hughes announced the acquisition of Altus Intervention, a leading provider of down-hole oil and gas technology and well intervention services. Baker Hughes' existing offering of oilfield technologies and integrated solutions will be expanded by 11 countries where Altus previously operated.

Author Credits:  Dhruv Bhatia


  • Report ID: 5022
  • Published Date: Jun 14, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Rising demand for oil and gas, higher production of unconventional resources, and rising advancement in tools are the major factors driving the market growth.

The market size of downhole tools is anticipated to attain a CAGR of ~5% over the forecast period, i.e., 2023 – 2035.

The major players in the market are Aker Solutions ASA, AKITA Drilling Ltd., Archer Ltd., Baker Hughes Co., Dril Quip Inc., Halliburton Co., Hunting Plc, Innovex, NexTier Oilfield Services Inc., Tryton Tool Services Ltd.

The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

The market is segmented by tool type, location, application, and by region.

The drilling segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.

High process of oil and gas, and the negative impact of drilling on the environment are estimated to be the growth-hindering factors for the market expansion.

The market in the Middle East and Africa region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Downhole Tools Market Report Scope
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