DRILLING FLUIDS MARKET ANALYSIS

Market Challenges And Opportunities

Global Drilling Fluids Market Drivers:

Rise in onshore and offshore drilling activities to boost the market growth

Drilling fluids are crucial for drilling operations as they serve various functions. The use of these fluids in excavation of subsurface well is prominent. Drilling fluids have various functions including subterranean pressure control, well management, hydrokinetic transmission to the drill bit and downhole equipment, and wellbore stability. Drilling fluids including water-based fluids, oil-based fluids, synthetic fluids, and non-aqueous fluids are often used in onshore and offshore energy and petroleum operations. Thus, with rising drilling activities around the world, the global drilling fluids market is expected to gain strong growth over the forecast period.

Growing demand for shale gas to drive the market growth

The demand for gas-based technology of power generation is increasing all over the world with growing focus on cutting down carbon emissions. Several countries around the world including, Germany, India, and Canada are focusing on development of shale gas exploration resources. According to the International Energy Agency (IEA), the gas share in the global energy mix is likely to increase from 23% to 25% in 2035, which will overtake coal and become the second-biggest primary energy source after oil. Thus, the demand for drilling fluids is likely to increase in the coming year. This factor in turn is anticipated to propel growth of the global drilling fluids market over the forecast period.

Global Drilling Fluids Market Opportunities:

Rise in oil demand in Asia Pacific region is expected to generate growth opportunities in the global drilling fluids market over the forecast period. Countries across Asia Pacific have been one the leading oil-importing countries in the world. However, the complex geology of the region makes it reliant on other countries for the supply of its increasing energy demands. For instance, according to Coherent Market Insights, the consumption of oil per day in Asia Pacific was 34.6 billion barrels in 2020, which accounted for 35% of the overall oil consumption around the world. Thus, several companies are likely to increase their exploration and production expenditure in this region. This in turn will create ample opportunities in the global drilling fluids market.

Increasing deepwater and ulta-deepwater drilling activities are anticipated to offer multiple business opportunities in the global drilling fluids market over the forecast period. With the discovery of oil and gas reservers in West Africa, South America, and Asia Pacific, the deep-water and ultra-deepwater drilling activities are increasing rapidly. Most of the offshore activities are being carried out in deepwater zones, such as Nigeria, Angola, the U.S., Malaysia, Brazil, and Norway. Recently found frontier locations such as east coast of Africa including the eastern Mediterranean, and west coast of Australia are likely to boost expansion of offshore reserves. This in turn is expected to create growth opportunities in the global drilling fluids market.

Global Drilling Fluids Market Restraints:

Changing prices of crude oil to hinder the market growth

The use of drilling fluids is increasing all over the world with growing expenditure on offshore oil and gas exploration and extraction activities. With the upstream efforts of the oil and gas industry, the crude oil output capacity are increasing. However, the crude oil prices are volatile, depending on economic conditions the prices continue to fluctuate, which further impacts demand for this oil. With increasing volatility of crude oil prices, the demand for drilling fluids is adversely impacted. This in turn is expected to limit growth of the global drilling fluids market over the forecast period.

High cost of deepwater and ultra-deepwater drilling to impede the market growth

The importance of drilling fluids is all drilling operations is high, particularly in deepwater environments, as these environments exhibit various technical challenges of drilling such as harsh conditions. This further creates significant vulnerabilities as well as high cost in the development of these fields. Deepwater operations usually are performed at high-risk, high-cost, and require long durations for completions, due to which they are at risk of short-term swings in cost of oil compared to onshore activities. Thus, preferring deepwater and ultra-deepwater drilling operations creates high risks in various aspects. This in turn is anticipated to hamper growth of the global drilling fluids market over the forecast period.