Factors such as rising deepwater oil and gas activity especially in the Gulf of Mexico, Brazil and the North Sea, improved viability of deepwater and ultra-deepwater projects, and tightening supply-demand gaps are expected to drive the market during the forecast period.
However, volatile crude oil prices, instability in the oil & gas industry, and higher challenges in developing deepwater prospects, are likely to affect the growth of the deepwater drilling market.
The deep water drilling market is moderately fragmented due to many companies operating in the industry. The key players in this market include Transocean, Seadrill Limited, Noble Corporation, Pacific Drilling, Diamond Offshore Drilling, and others.
The deepwater drilling sector is expected to witness a significant growth rate over the forecast period owing to the upcoming deepwater exploration and production projects in countries such as Brazil, Guyana, Nigeria, and others.
Factors, such as technological improvements and increasing viability of deepwater and ultra-deepwater projects, several new markets, such as Gabon, Senegal, Guyana, Trinidad & Tobago, Egypt, and the Mexican side of the Gulf of Mexico are actively promoting the development of deepwater and ultra-deepwater reserves. This, in turn, is expected to create significant opportunities for the operating countries in the near future.
South America is going to dominate the market across the globe following with Middle East & Africa with the majority of the demand coming from Nigeria, Angola, and Egypt.
Major Market Trends
Deepwater Drilling Sector to Dominate the Market Growth
The investments related to deepwater projects are expected to be limited, before 2025. These resources are typically more expensive to develop, take a longer time to reach full production, and require additional investment in infrastructure, because of their presence in remote locations. However, most of the projects that are currently under development are expected to continue their operations.
Despite high fixed costs and the requirement of long lead times from project conception to the first production, offshore deepwater oil projects provide large production volumes that can achieve relatively low per-barrel operating costs over the reservoir life cycle.
The majority of deepwater drilling and production takes place in four countries: Brazil, the United States, Angola, and Norway. In recent years Brazil have become a world leader in the development of deepwater projects. Norway pumped approximately USD 6 billion in the exploration and development of deepwater oil & gas platforms.
Moreover, the recent waves of cost reductions and critical technological breakthroughs have enabled many oil and gas exploration and production companies to expand their portfolio of sustainable deepwater developments.
South America to Dominate the Market Growth
As the demand for energy is increasing rapidly, various countries and major companies and investors are shifting their interest toward deep water, as it holds the potential for a guaranteed supply of oil & gas for few decades.
In 2018, Brazil and the United States together accounted for more than 90% of ultra-deepwater production globally. According to EIA, Brazil is a world leader in the development of deepwater and ultra-deepwater projects. The change in government policy in recent years such as liberalization in the oil & gas sector attracted foreign investment in the country. Moreover, the presence of the most experienced international oil companies in the deepwater development and the largest deepwater reserves makes Brazil the most attractive countries for upstream deepwater investment.
Similarly, in the same year, a new exploration permit was awarded in April 2019 to the consortium formed by ExxonMobil and Qatar Petroleum, for exploration in Malvinas Oeste Basin. 13 companies offered approximately USD 995 million for exploration licenses of areas within the Austral, Argentina Norte, and Malvinas Oeste basins. All the three basins are offshore, combining to a total tendered area of more than 200,000 sq. km. never explored before.
In 2019, Brazil held its sixth successful oil and gas bid round in just over a year and awarded all four blocks in the prospective pre-salt area for BRL 6.82 billion. The latest investment and upcoming projects in deepwater are likely to drive the growth of the deepwater drilling market during the forecast period in the South America region.
Therefore, with rising investments in deepwater and ultra deepwater projects and supporting policies from governments are expected to drive the market in forecast period.
Key Topics Covered
1 INTRODUCTION 1.1 Scope of the Study 1.2 Market Definition 1.3 Study Assumptions
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET OVERVIEW 4.1 Introduction 4.2 Market Size and Demand Forecast, in USD billion, till 2025 4.3 Deep water Active Drilling Rigs, till 2019 4.4 Historic and Demand Forecast of Offshore CAPEX in USD billion, by Water Depth, 2018-2025 4.5 Historic and Demand Forecast of Offshore CAPEX in USD billion, by Regions, 2018-2025 4.6 Number of Deep Water Drilling Project Approved 2007-2018 4.7 Number of Floater Rigs and Contracted Rig Years, 2007-2018 4.8 Share of Under Contract, Future Contract, and Idle/Stacked for Floater Rigs, 2018 4.9 Major Deep Water Upstream Projects 4.10 Recent Trends and Developments 4.11 Government Policies & Regulations 4.12 Market Dynamics 4.12.1 Drivers 4.12.2 Restraints 4.13 Supply Chain Analysis 4.14 Porter's Five Forces Analysis
5 MARKET SEGMENTATION 5.1 Type 5.1.1 Drill Ship 5.1.2 Semisubmersibles 5.1.3 Tender Rigs 5.1.4 Others 5.2 Depth 5.2.1 Deep Water Drilling 5.2.2 Ultra Deep Water Drilling 5.3 Geography 5.3.1 North America 5.3.2 Europe 5.3.3 Asia-Pacific 5.3.4 South America 5.3.5 Middle-East & Africa
6 COMPETITIVE LANDSCAPE 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements 6.2 Strategies Adopted by Leading Players 6.3 Company Profiles 6.3.1 Transocean Ltd. 6.3.2 Seadrill Limited 6.3.3 Noble Corporation 6.3.4 Ocean Rig UDW Inc. 6.3.5 Pacific Drilling S.A. 6.3.6 Diamond Offshore Drilling, Inc. 6.3.7 Saipem S.p.A. 6.3.8 Ensco plc 6.3.9 SapuraKencana Petroleum Berhad 6.3.10 China Oilfield Services Limited 6.3.11 Maersk Group