Directional Drilling Services Market Intelligence

Industry Outlook & Drivers

Global Market Outlook Directional Drilling Services

• The global directional drilling service market is estimated at $9.01 billion in 2018 and is expected to reach $10.77 billion by the end of 2021, with a CAGR of 6.13 percent
• The directional drilling services market is highly consolidated by the top global players, such as Schlumberger, Baker Hughes, and Halliburton, constituting to more than 60 percent of the market share
• North America and the Middle East regions are highly lucrative markets for directional drilling, due to most of the producingwells have reached to matured stage

• Directional drilling is a technique of controlling trajectory and deviation of a wellbore, along a pre-planned path to tap the oil from targeted locations, which otherwise would have been left inaccessible
• Directional drilling allows drilling of deviated/horizontal wells, wells with multiple angles, multilateral wells from the same horizontal wellbore, to reach multiple targets as well as multiple wells from the same location, thereby saving time and cost
• The directional services market is anticipated to grow at a CAGR of 6.13 percent from 2018 to 2021 to reach $10.30 billion by 2021
• The supply of complete directional drilling services is consolidated to major service providers. Schlumberger has been a leader in this segment over the years, with a market share of 30 percent globally
• Globally, North America holds the largest market share, followed by the Middle East, and the demand from this region is expected to dominate in the forecasted period, as more projects are coming up in the near future

Market Drivers and Constraints

Drivers

• Directional drilling has helped in new oil field discoveries, which otherwise would have been challenging to tap because of geographical location
• Complex geological structures and Shale are the key drivers for directional drilling in North America and APAC
• Nearly, 70 percent of the world's oil & gas production accounts from mature fields. This high number of maturing fields in onshore and offshore applications would demand directional drilling to tap the maximum reserves, in order to meet the increased demand globally
• Ease of mobility in onshore regions allows multiple usages of directional drilling services. This can save a lot of lost time and cost by making the most efficient use of the equipment
• Rebounding oil prices are driving the companies to carry out E&P activities

Constraints

• Increasing focus on renewable energy, such as solar, wind, etc., globally is a major concern
• Stringent regulatory policies and environmental concerns might hold back the market

Cost Analysis

• Monthly rentals vary from $359,220 to $404,573 in the global market, depending on the suppliers
• The North American market has the highest prevailing monthly rates, due to the increased number of E&P activities in the Gulf of Mexico and for shale gas
• Long-term contracts with an assured number of jobs can provide better cost efficiency to the operator
• Top-tier suppliers are the global suppliers, who charge a premium pricing
• Low-tier suppliers are restricted to a particular state or a region in a country with limited operations
• At times, supplier tends to cross-subsidize the personnel day rates with equipment rental to win contracts