Drill bits are used in the oil &gas industry in the drilling application to create holes or crush or cut rocks in order to extract hydrocarbon resources, by applying hydraulic pressure and high-frequency vibration. Drill bits are basically produced from Tungsten, Carbide, and Diamond. Moreover, the drill bits are classified into fixed cutter bits and roller cone cutter bits.
The global drill bits for oil and gas industry application market is estimated to be valued at US$ 14,218.2 million in 2021 and is expected to exhibit a CAGR of 5.5% over the forecast period (2021-2028).
Figure 1. Global Drill Bits For Oil and Gas Industry Application Market Value (US$ Mn), by Region, 2020
North America (Region) held dominant position in the global drill bits for oil and gas industry application market in 2020, accounting for 38.06% share in terms of volume, followed by RoW and Europe, respectively.
The increased demand for natural gas has as well as increased oil and gas exploration and production led to an increase in shale gas exploration efforts all over the world. They're being done to help the environment by reducing carbon emissions. The majority of shale gas activity is centred in North America.
Global Drill Bits for Oil and Gas Industry Application Market: Drivers
Ongoing technological advancement in the oil &gas industry is projected to augment the market growth of the drill bits for oil and gas industry applications. Horizontal drilling and hydraulic fracturing (a type of drilling used for shale gas are some of the types of advanced technology used in the oil &gas industry. These advanced techniques help in increasing the output of crude oil and other liquid hydrocarbons. Thus advancement in the technology is projected to foster the market growth of the drill bits.
Increasing production of crude oil due to the growing demand for petroleum products is expected to drive the market growth. According to the U.S. Energy Information Administration, global consumption of petroleum and liquid fuels averaged 94.3 million b/d in August 2020. Moreover, it expects that global liquid fuels production will rise to an annual average of 99.3 million b/d in 2021. Thus growing demand for petroleum products is projected to fuel market growth.
Global Drill Bits for Oil and Gas Industry Application Market: Opportunities
New oilfield discoveries is expected to create enormous market opportunities over the forecast period. According to the French Institute of Petroleum, in total, 140 discoveries were made globally in 2018, and gas resources accounted for about 40% of the volumes found. Offshore discoveries predominated, with 70% of the new volumes found over the year. Only four discoveries were of unconventional hydrocarbons. They accounted for 7% of the resources discovered in 2018.
Increasing onshore drilling activities across developing regions is projected to serve major market opportunities. In 2018, 67,000 wells were drilled onshore and 2,300 offshore. In 2018, in the United States, there were 15,000 horizontal wells drilled for gas and shale oil, representing more than 20% of global drilling activity. Thus, growing onshore drilling activities is projected to favor the market growth of the drill bits for oil and gas industry applications over the forecast period.
|Base Year:||2020||Market Size in 2021:||US$ 14,218.2 Mn|
|Historical Data for:||2017 to 2020||Forecast Period:||2021 to 2028|
|Forecast Period 2021 to 2028 CAGR:||5.5%||2028 Value Projection:||US$ 22,680.7 Mn|
Atlas Copco, Varel International Inc., Baker Hughes, Inc., Smith International, Inc. , National Oil-well Varco Inc., Halliburton Inc., Scientific Drilling International Inc., Torquato Drilling Accessories Inc., Kingdream Public Limited Company, Tercel oilfield Product
|Restraints & Challenges:||
Continuous product innovation by key manufacturers is a growing trend in the market. For instance, in September 2017, Halliburton announced the launch of GeoTech HE™, a robust drill bit that incorporates new features and materials to deliver enhanced performance and increased reliability in high-energy drilling systems characterized by very high weight-on-bit and drilling torque.
The growing number of crude oil production projects is one of the major trends in the market. Also, increasing export and import of crude oil is further anticipated to augment the market growth. In 2019, the Canadian supply and demand of crude oil slightly increased from 2018 with the production of 4.7 MMb/d. The market was the values of imports and exports of 0.8 MMb/d and 3.8 MMb/d respectively. Thus growing export and import of the crude oil is projected to drive the market to grow
Figure 2. Global Drill Bits for Oil and Gas Industry Application Market Share, By Product, 2020
Key Takeaways of the Graph:
Fixed cutters bits work well in shale formations, especially when combined with oil-based muds and cutter to shale rock with a continuous scraping motion.
Global Drill Bits for Oil and Gas Industry Application Market: Restraints
The fluctuating price of raw materials used in the creation of drill bits is leading to the gap in supply and demand. This is a factor that is projected to hinder the market growth of the drill bits for oil and gas industry applications.
High maintenance cost and transition time of the drilling tool are expected to limit the adoption across end-user which is expected to hamper the market growth over the forecast period. Also, increasing focus on renewable energy sources is expected to hamper the market growth of the drill bits for oil and gas industry applications.
Global Drill Bits for Oil and Gas Industry Application Market: Competitive Landscape
Major players operating in the global drill bits for oil and gas industry application market include, Atlas Copco, Varel International Inc., Baker Hughes, Inc., Smith International, Inc., National Oil-well Varco, Inc., Halliburton Inc., Scientific Drilling International Inc., Torquato Drilling Accessories Inc., Atlas Copco., and Kingdream Public Limited Company.
A drilling bit is used in petroleum exploration to drill a wellbore through various layers of rock formations to access oil or natural gas resources. It penetrates the subsurface rock formations. In recent years, oilfield drilling has turned out to be an intricate part of the overall oil industry strategy. Today, exploration and extraction of crude oil from the ground is crucial for any company involved in oil and gas business.
Increasing number of gas processing units is expected to propel growth of the global drill bits for oil and gas industry application market. For instance, in October 2021, PJSC LUKOIL, a crude petroleum and natural gas extraction company, announced to add a second gas processing unit that will enable increased production of petrochemicals from northern Caspian Sea natural gas at subsidiary Stavrolen LLC’s petrochemical complex in Budennovsk, Stavropol Region, and Russia.
Moreover, increasing demand for drilling is also expected to aid in growth of the market. For instance, in October 2021, Equinor Energy AS, an energy company, amounted a contract to COSL Offshore Management AS, a drilling services provider, to drill four wells on Statfjord Øst, in the Tampen area in the North Sea, starting in spring 2023.
Key features of the study: