by Offshore drilling rigs are floating vessels or platforms that can drill new oil or gas wells in shallow or ultra-deep waters. These rigs are equipped with machinery and tools to drill wells located offshore. Common types of offshore drilling rigs include semi-submersible rigs, jackup rigs, and drillships. Semi-submersible rigs can operate in deeper waters while drillships are used for drilling in ultra-deep waters. Offshore drilling rigs are crucial for exploration and production of oil and gas resources located in offshore reserves around the world.
The Offshore Drilling Rigs Market is estimated to be valued at Us$ 75.40 Bn in 2023 and is expected to exhibit a CAGR Of 6.8% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rising energy demand along with depletion of onshore reserves is a key driver for the offshore drilling rigs market. According to figures from BP’s Statistical Review of World Energy, oil and gas production from offshore reserves has grown significantly over the past decade to meet the rising global energy needs. Increasing focus on deepwater and ultra-deepwater exploration projects by major energy companies is also boosting demand for technologically advanced offshore drilling rigs that can operate in harsh conditions. Additionally, high capital investments required for offshore projects compared to onshore contributes to long term requirement of offshore drilling rigs under contract. However, volatility in oil prices poses challenges to rig utilization and offshore project investments. Strict government regulations regarding emissions and spill prevention in offshore activities also increase compliance costs for drilling rig owners and operators.
Segment Analysis
The offshore drilling rigs market is dominated by the jackups sub segment. Jackup rigs are self-elevating mobile platforms and have legs that can extend downward and penetrate the seafloor. These jackup rigs account for over 45% of the global offshore rig fleet. They are considered more suited for shallow water operations of 400 feet or less. The shallow water drilling activities represent majority of the exploration and production activities, thus driving the dominance of jackup rigs in the offshore drilling market.
PEST Analysis
Political: Stable political regimes and supportive regulatory frameworks governing offshore E&P activities drive investments in countries such as the US and Brazil. However, uncertainty in policies impact market dynamics in certain regions.
Economic: High demand for oil and gas to meet rising global energy needs and moderate crude oil prices boost investments in offshore exploration. However, economic slowdowns impact spending.
Social: Increasing focus on renewable sources of energy and emphasis on reducing carbon footprint pose challenges. However, continued dependency on oil and gas ensures sustained demand.
Technological: Use of advanced digital technologies like robotics, big data analytics, and Internet of Things enable higher efficiencies. Automated rigs requiring fewer personnel also gain adoption.
Key Takeaways
The Global Offshore Drilling Rigs Market Demand was valued at US$ 75.40 bn in 2023. The market is expected to witness high growth, exhibiting a CAGR of 6.8% over the forecast period, driven by increasing investments in offshore E&P activities.
Regional analysis:
The Asia Pacific region is expected to dominate the market during the forecast period, growing at a CAGR of over 7%. This can be attributed to increasing exploration activities and investments in offshore fields by major countries like China, India, Indonesia, Malaysia and Australia in the region.
Key players:
Key players operating in the offshore drilling rigs market include Equinor, Shell PLC, Schlumberger Limited, Saipem, KCA Deutag, Nobel Corporation, Pacific Drilling, Seadrill, Halliburton, Weatherford International Inc., Aban Offshore Limited, and China Oilfield Services Ltd. These companies are focusing on new product launches and mergers & acquisitions to strengthen their market position.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
