Offshore Drilling Market Analysis by Type (Jackups, Semisubmersible, and Drill Ships); and by Depth (Shallow Water, and Deep Water & Ultra-Deepwater) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4895 | Published Date: May 02, 2023
Offshore Drilling Market size is estimated to reach ~USD 237.19 Billion by the end of 2035 by growing at a CAGR of ~7.54% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of offshore drilling was ~USD 99.14 Billion. The growth of the market can be attributed to growing demand for heat and electricity. By 2030, the total amount of electricity required worldwide would increase by about 5,899 terawatt-hours (TWh) under the Stated Policies Scenario (STEPS) and by over 6,999 TWh under the Announced Pledges Scenario (APS), which is the same amount as the combined demand for electricity in the United States and the European Union today. The majority of heat and power are produced using conventional fuel. Additionally, a significant portion of the electricity used for heating and cooling is projected to increase demand for hydrocarbons, hence further boosting the market growth.
Moreover, with the growing interest in hydrocarbons the demand for natural gas is estimated to grow by about 49% by 2040 globally. Hence, the offshore drilling is estimated to increase. Despite the increased expenses involved in producing oil and gas offshore, offshore well reserves are higher than those in onshore wells. Upstream businesses would probably use and produce these vast reserves. As a result, the worldwide offshore drilling industry would be driven as the need for oil and gas increases. Furthermore, surge in investment in offshore drilling is also estimated to drive the growth of the market over the forecast period.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~7.54% |
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Base Year Market Size (2022) |
~ USD 99.14 Billion |
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Forecast Year Market Size (2035) |
~ USD 237.19 Billion |
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Regional Scope |
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Growth Drivers
Challenges
The global industry is segmented and analyzed for demand and supply by depth into shallow water, deep water & ultra-deep water. Out of which, the deep water & ultra-deep water segment is anticipated to garner the highest revenue by the end of 2035. The growth of the segment can be attributed to growing deep water activities. Moreover, growing demand for crude oil is also estimated to boost the growth of the segment. According to projections, the demand for crude oil (including biofuels) was estimated to rise to about 95 million barrels per day in 2021 from approximately 90 million barrels per day in 2020 across the globe. Hence, the demand for offshore drilling is estimated to increase in deep water or ultra-deep water. Although exploring and drilling in shallow water has historically been less expensive and technically difficult, shifting economic conditions and the depletion of some shallow offshore resources have pushed producers to look for deepwater or, in some cases, ultra-deepwater (at depths of 1,500 meters or more) resources.
The global offshore drilling industry is also segmented and analyzed for demand and supply by type into jackups, semisubmersible, and drill ships. Amongst which, the jackups segment is anticipated to have a significant growth over the forecast period. Initially, sea and wind conditions regularly caused disruptions to the oil drilling process. Hence, the importance for jackups grew and is still growing. A jack-up rig's capacity to tolerate adverse weather or environmental conditions after it is attached to a spot is one of its main advantages. Additionally, a jack-up rig transmits motion produced by weather and ocean currents to the subsea. To create a more stable system that considerably reduces equipment damage, engineers may combine jack-ups with high-pressure risers. The load on the surface and subsea components is reduced when a jack-up rig is used. Tree handling and installation tasks may be completed using jack-up rigs. Given their low fuel usage, these rigs are very economical. When in use, the rigs also aid in lowering pollution. Owing, to this the preference is growing.
Our in-depth analysis of the global offshore drilling market includes the following segments:
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By Type |
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By Depth |
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The market share of offshore drilling in Middle East & Africa, amongst the market in all the other regions, is projected to have the highest growth by the end of 2035, backed by growing oil demand and surging exports of oil from Africa. In 2021, Africa exported more than about 925 thousand barrels of petroleum products daily. The offshore oil and gas markets in the Middle East and Africa are among the most significant in the world, with Saudi Arabia, the United Arab Emirates, South Africa, and Nigeria among the major producers. The economies of the nations in the region are reliant on the export of hydrocarbons. As hydrocarbon prices rise, offshore exploration and production are therefore anticipated to rise. Moreover, two new contracts for two high-specification Jack-Up drilling rigs, the Perro Negro 12 and Perro Negro 13, which were chartered by outside parties for drilling and workover operations on the particular projects, were awarded in the Middle East. According to estimates, the first unit's operations would last five years plus two additional optional years while the second unit's operations would last three years plus an additional optional year. Both projects were set to begin between the third and fourth quarters of 2023. Hence, such projects are also estimated to boost the growth of the market in this region.
The Asia Pacific offshore drilling market is estimated to be the second largest, to have the highest growth over the forecast period. The growth of the market in this region can be attributed to growing imports of oil in this region. In this region, China is the world's biggest energy consumer. However, the nation is mostly dependent on energy imports since of the relatively lower conventional hydrocarbon reserves. The nation has been making significant investments to optimize the potential of its local reserves in an effort to lessen its reliance on energy imports. Hence, this factor is estimated to boost the growth of the market in this region. Also, with growing demand for automotive engine oil the market is anticipated to grow in this region.
Additionally, the market in North America is also estimated to have the significant growth over the forecast period. The petrochemical sector is a major driver of the market in this area. The petrochemical industry has expanded as a result of increased petrochemical product usage in end-use industries. Additionally, the cost of oil and gas in North America influences market expansion through political and economic factors. Hence, this factor is estimated boost the growth of the market in this region.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Payel Roy, Dhruv Bhatia
Ans: The major factors driving the growth of the market are growth in urban population, growing offshore drilling activities, rise in price of crude oil, and others.
Ans: The market size of offshore drilling is anticipated to attain a CAGR of ~7.54% over the forecast period, i.e., 2023 – 2035.
Ans: High operational cost, rising demand for electric vehicles, and diverse effect on marine organism are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the Middle East & Africa region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Transocean, Ltd., Nabors Industries, Ltd., Seadrill Limited, Saipem S.p.A., and more.
Ans: 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.
Ans: The market is segmented by type, depth and by region.
Ans: The jackups segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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