Downhole Equipment Market: Current Analysis and Forecast (2022-2028)

Downhole equipment is pieces of oilfield equipment that are used during well drilling, completion, and intervention or well workover activities and help the oil well in optimizing the production levels and maintaining a continuous flow from a reservoir. These tools are highly efficient in high temperature and pressure conditions and are used in the bottom-hole assembly for workover operations. Consistent development of downhole tools has encouraged companies to manufacture innovative and effective components so as to offer benefits to oil and gas producers such as cost-cutting and efficient production processes.

In addition, major players are trying to adopt cutting-edge innovation technology so as to reach hotter and harder reservoirs and meet the ever-increasing global demand for energy. For instance: In 2022, Schlumberger introduced Neuro autonomous solutions for hydrocarbon exploration and development that use advanced cloud-based software and connected intelligent systems that create a continuous feedback loop between surface and downhole.

Based on the type, the downhole equipment market is segmented into drilling tools, pressure & flow control tools, handling tools, impurity control tools, and others. The drilling tools acquired dominating share in the global downhole tools market. Drilling tools such as drill bits, drilling mud motors, stabilizers, drilling jars, drilling pipes, reamers, and others are required for complex drilling operations in oil wells. Moreover, in recent years drilling tools have moved in an upward trajectory particularly to overcome the hurdles put forth by directional drilling technology. Further, its ability to offer drillers and engineers real-time insights is due to which, prompt and efficient decisions can be undertaken to improve direction drilling.

Based on application, the downhole equipment market is categorized into well drilling, well completion, well intervention, well production, and formation & evaluation. The well-intervention segment caters to a significant market share. The declining shallow water resources have spurred technical advances that allow offshore exploration and production in deeper, harsher environments. Further, new discoveries and pressure to improve recovery rates from developed fields increase demand for subsea intervention which escalates the need for well intervention.

Based on the end-user industry, the downhole equipment market is classified into the oil and gas industry, mining industry, geothermal industry, and petrochemical industry. The oil and gas industry acquired a significant share of the downhole equipment market. Oil and gas exploration encompasses the processes and methods involved in locating potential sites for oil and gas drilling and extraction. In recent years, oil and gas companies are increasingly shifting towards clean energy transitions by lowering the emissions intensity of new upstream and LNG developments which in turn is expected to accelerate the opportunities for downhole equipment in oil and gas industry.

For a better understanding of the market adoption of the downhole equipment market is analyzed based on its worldwide presence in the countries such as North America (U.S., Canada, and the Rest of North America), Europe (Germany, U.K., France, Spain, Italy, and Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. North America is anticipated to grow at a substantial CAGR during the forecast period. This is mainly attributed to the factors such as the increasing number of activities and oil production from the Permian Basin in the United States coupled with a reduction in the cost of drilling, new drilling and production technologies, and increasing oil prices are likely to drive the market. For instance: In February 2022, BP PLC announced the start of the Herschel Expansion project in the Gulf of Mexico.

In December 2021, ConocoPhillips started production at its GMT-2 oil project in the National Petroleum Reserve-Alaska. The project is expected to produce 30,000 b/d at its peak. The development costs for the project were USD 1.4 million.

Some of the major players operating in the market include: Schlumberger Ltd., Halliburton Co., Saint Gobain, Baker Hughes, Weatherford International Ltd., Exwell Oil field, Rubicon Oilfield Products Limited, Toro Downhole Tools, Cougar Drilling Solutions, Vertex Downhole.