Offshore Oilfield Services Market - Growth, Trends, and Forecasts (2022 - 2027)

The global offshore oilfield services market is expected to reach USD 50.95 billion by the end of this year and is projected to register a CAGR of over 5.8% during the forecast period.

The market is negatively impacted by COVID-19 in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the medium term, factors such as increasing offshore oil and gas exploration and production activities are expected to drive the market during the forecast period.
• On the other hand, a ban on several offshore activities in various regions and countries is expected to hinder market growth during the forecast period.
• Nevertheless, several technological advancements and optimization of available resources are expected to create many opportunities for the offshore oilfield services market in the future.
• Asia-Pacific due to its recent deep-water exploration and production activities is expected to witness significant market growth during the forecast period.

Key Market Trends

Drilling Services Expected to Dominate the Market

• Offshore drilling services refer to the process by which tubing is bored through the earth's surface beneath a sea and a well is established. A pump is connected to the tube and the petroleum under the surface is forcibly removed from underground. The most common drilling methods used for the extraction of oil and gas beneath the sea are rotary drilling, directional drilling, Managed Pressure Drilling (MPD), percussion drilling, and others.
• Deepwater oil production is majorly concentrated in four countries - Angola, Brazil, Nigeria, and the United States. During the past years, Deepwater investments have retained a significant share of offshore investments, reflecting opportunities in the Gulf of Mexico and offshore Latin America (Brazil and Guyana).​​
• Mature offshore fields are also creating opportunities for the drilling services market in the offshore segment. In Norway, oil companies plan to nearly double exploration drilling offshore Norway to focus on more mature areas of the Norwegian Continental Shelf (NCS). Moreover, Angola's deepwater production is also set to ramp up as its shallow-water sector matures. Therefore, owing to the plans to increase production from mature fields, the demand for drilling services in the offshore segment is expected to be driven during the forecast period.​​
• Similarly, in its five-year business plan (2018-2023), Petrobras, a Brazilian oil and gas firm, aims to drill 178 wells comprising of oil production wells and injection wells. ​Furthermore, Colombian oil and gas exploration projects are likely to attract more than USD 3.2 billion in 2021, driven by offshore developments, according to the latest energy ministry forecast. ​
• In February 2022, Abu Dhabi National Oil Company (ADNOC) kicked off a bid process for an engineering, procurement, construction and installation contract for further development at its huge Lower Zakum offshore oilfield. The development is expected to bolster offshore exploration activities and is expected to drive the demand for the drilling services during the forecast period. ​
• In 2022, Saudi Arabia and Kuwait agreed to develop the Durra Offshore Gas field that lies between the neutral zone of both countries. The offshore oilfield is expected to produce 1 billion cubic feet per day and 84,000 barrels per day of condensate.
• Therfore, owing to the above points, drilling services is expected to dominate the market during forecast period.

Asia-Pacific Expected to Witness Significant Growth

• The Asia-Pacific region is another significant market for offshore oilfield services with a majority of the market being dominated by countries like India, China, Indonesia, etc.​
• China is the fifth-largest producer of crude oil, globally, producing 3,900 thousand barrels per day in 2020. Since the 2015-2016 slump in oil price, crude oil production has been on a decline, owing to cuts in upstream spending.​
• However, in 2019, as a result of President Xi Jinping's call to expedite the domestic exploration and production activities (particularly for natural gas) and to improve national security, multiple companies, particularly CNOOC, CNPC, and Sinopec, were likely to increase their capital expenditures in the offshore regions. ​
• In November 2021, the Chinese national oil company CNOOC declared that it had started production from Lufeng offshore oil fields in the eastern part of the South China Sea. The main production facilities include two drilling production platforms and one subsea production system. ​
• CNOOC also announced its plans to develop a deepwater oilfield complex in the next few years, and it aims to double its exploration workload and proven reserves by 2025.
• Similarly, in January 2021, CNOOC started the installation of the world's first 100,000-ton deep-water semi-submersible production and storage platform, Deep Sea-1. The platform was built by China and will be used to develop the Lingshui gas field; it has an average water depth of 1,450 meters in the South China sea. ​
• India, being a crude oil and gas importing country, with net imports of about 83% of its crude oil and about 47% of natural gas consumption, had not been much affected by the downturn in the industry in the past. Additionally, the number of exploration and development wells had not fluctuated much in the past few years, resulting in an almost stagnant demand for related equipment and services. ​
• The Ministry of Petroleum and Natural Gas announced that it plans to focus on the oil and gas blocks auctions, to earn more revenue and increase the production. Furthermore, the Hydrocarbon Exploration and Licensing Policy (HELP), which was approved by the government in March 2016, forms a part of the government's strategy to double India's oil and gas output by 2022-2023. ​
• Offshore oil and gas have witnessed significant growth in Indonesia in recent years. In January 2021, SK MIGAS announced that BP Indonesia intends to increase its investment in Indonesia to increase Tangguh reserves in Papua by around USD 4 billion.​ In August 2021, Pertamina made an oil and gas discovery in the Central Business Unit (CBU) District of the OSES Block.
• Therefore, owing to the above points, Asia-Pacific is expected to witness significant growth during the forecast period.

Competitive Landscape

The offshore oilfield services market is moderately fragmented. Some of the major players in the market (in no particular order) include Transocean LTD, Schlumberger Limited, Baker Hughes Company, Weatherford International PLC, and Halliburton Company, among others.

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