June 13, 2024
Offshore Drilling Rigs Market

Offshore Drilling Rigs Market is Expected to be Flourished by Rising Demand for Energy

Offshore drilling rigs are self-propelled vessels used for drilling exploratory wells and for production of oil and gas deposits located under seawater. These rig structures comprise of equipment such as drilling apparatus, mud pumps, and blowout preventers. Offshore rig designs are engineered for safety and efficiency in harsh marine conditions. Currently, drillships and semi-submersibles are the most common types used in deepwater drilling. Key applications of offshore drilling rigs include exploration drilling, development drilling, workover, and well intervention processes.

The global offshore drilling rigs market is estimated to be valued at US$ 86.87 billion in 2024 and is expected to exhibit a CAGR of 8.5% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Rising demand for energy and discovery of new oil & gas reserves in offshore locations serve as the major drivers for growth of offshore drilling rigs market over the forecast period. As per the forecast mentioned in the heading, global energy demand is expected to rise by 48% between 2021 to 2050. To meet this demand, exploration and production of hydrocarbon reserves including offshore reserves will need to be increased significantly, thereby driving demand for offshore drilling rigs and services over the coming years. As mentioned in the heading, discovery of new reserves in offshore regions like East and West Africa, South America, Eastern Mediterranean, and Asia Pacific is further expected to boost deployment of offshore drilling rigs.

The global offshore drilling market is fragmented in nature with presence of many regional and international players. Some of the key players operating in the global offshore drilling rigs market include Sims Metal Management Ltd., Schnitzer Steel Industries, Inc., Nucor Corporation, European Metal Recycling Ltd., Kuusakoski Group, Novelis Inc., OmniSource Corporation, Ferrous Processing & Trading Co. (FTP), Metal Management Inc., and ELG Haniel Group.

Segment Analysis

The offshore drilling rigs market can be segmented into jackup, semi-submersible, and drillships. Jackup rigs dominate the market with around 50% share owing to their low installation and operating costs and suitability for water depths of 400 feet or less. These rigs are well-suited for shallow waters and have legs that can be lowered to the sea floor allowing the drilling package to be elevated above the surface of the water.

Pest Analysis

Political: Offshore drilling is subject to regulations related to environmental protection and safety standards set by regional maritime authorities which can affect investments.

Economic: Volatility in oil prices impact exploration and production spending cycles and subsequent demand for offshore rigs. However, long-term demand is supported by improving accessibility to reserves in deepwaters and remote locations.

Social: Safety and environmental impact of offshore drilling operations are monitored closely by stakeholders. Adoption of new technologies helps to improve standards.

Technological: Advancements in areas such as rig design, digitalization solutions, automated systems help improve efficiency, reduce costs and meet stringent standards related to safety and emissions. This also enables exploitation of reserves in deepwaters and harsh environments.

Key Takeaways

The Global Offshore Drilling Rigs Market Size for 2024 is projected to reach US$ 86.87 billion.

The North America region dominates with the U.S. Gulf of Mexico holding sizable deepwater reserves. Robust activity is expected in the Mexican Gulf as well due to competitive operating conditions and significant untapped reserve potential.

Key players operating in the offshore drilling rigs market are Sims Metal Management Ltd., Schnitzer Steel Industries, Inc., Nucor Corporation, European Metal Recycling Ltd., Kuusakoski Group, Novelis Inc., OmniSource Corporation, Ferrous Processing & Trading Co. (FTP), Metal Management Inc., ELG Haniel Group. Demand for offshore rigs will see steady recovery as exploration and production investments ramp up, especially in Brazil,Guyana and the U.S. Gulf of Mexico regions over the forecast period. Advanced rig technologies will see greater adoption to enable efficient development of reserves in deeper offshore fields.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it