Global Offshore Drilling Market 2019-2023 | Declining Cost of Offshore Projects to Promote Growth | Technavio
The global offshore drilling market is expected to post a CAGR close to 9%
during the period 2019-2023, according to the latest market research
report by Technavio.
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The global offshore drilling market is expected to post a CAGR of close to 9% during the period 2019-2023 (Graphic: Business Wire)
A key factor driving the growth of the market is the increasing
deepwater and ultra-deepwater E&P activities. Due to vast untapped
reserves, deepwater and ultra-deepwater projects are expected to
increase during the forecast period because of the rising crude oil
prices. Hence, companies have expanded their drilling and production
operations in areas with large oil reserves such as the GOM and Brazil.
Furthermore, it is expected that the global offshore deepwater oil
production will increase by 2.7 mbpd between 2017 and 2040. Offshore
investments are also expected to grow at a CAGR of over 11% during
2018-2021. Subsequently, the rise in investments in offshore projects
will propel E&P activities in deepwater and ultra-deepwater locations.
Hence, the increase in E&P activities in deepwater and ultra-deepwater
resources will drive the global offshore drilling market during the
forecast period.
As per Technavio, the declining cost of offshore projects will have a
positive impact on the market and contribute to its growth significantly
over the forecast period. This global
offshore drilling market 2019-2023 research report also analyzes
other important trends and market drivers that will affect market growth
over 2019-2023.
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Global offshore drilling market: Declining
costs of offshore projects
Because of the complexities and the need for additional equipment and
methods for processing and transportation after extraction, the expenses
incurred in offshore drilling projects are higher than that of onshore
drilling projects. Offshore drilling projects need a longer timeline
than onshore drilling projects. Also, most of the offshore oil and gas
drilling contracts last several years. However, at present, the costs of
offshore projects are decreasing as designs are being standardized,
simplified, and downsized, and a large projection in the market for
offshore equipment and services is helping, reduce costs. Also, as crude
oil prices have started rising, more investments are expected in
offshore oil and gas projects, which will drive the global offshore
drilling market during the forecast period.
“Currently, there is an increase in the global offshore rig count, as
several oil and gas companies are investing significantly in offshore
drilling projects. The gradual recovery in prices of crude oil from the
third quarter of 2016 resulted in a global increase in the number of
active offshore rigs. This led to the growth in the number of wells
being drilled in both offshore deepwater and ultra-deepwater well sites.
Thus, these factors are expected to drive the global offshore drilling
market during the forecast period,” says an analyst at Technavio.
Global offshore drilling market: Segmentation
analysis
This market research report segments the global offshore drilling market
by applications (shallow water, deep water, and ultra-deepwater) and
geographical regions (APAC, Europe, MEA, North America, and South
America).
The shallow water segment held the largest market share in 2018.
Offshore drilling in shallow water is relatively safe when compared with
deepwater and ultra-deepwater, as it reduces the possibility of oil
spills. This makes the process safe and economically feasible.
APAC held the largest market share in 2018. There has been an increase
in demand for offshore oil and gas production to suffice the energy
needs, especially from the developing countries. Moreover, rising fuel
consumption is also driving the need for offshore drilling.
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