The global directional drilling solutions & services market was valued at US$ 8.5 billion in 2017, and is projected to reach US$ 18.3 billion by 2026, registering a CAGR of 8.6% over the forecast period (2018-2026), according to Directional Drilling Solutions & Services Market Report, by Solution (New Purchase and Rentals), by Services (Measurement-while-drilling (MWD) Services, Logging-while-drilling (LWD) Services, Rotary Steerable System (RSS) Services, Repair & Maintenance Services, and Consulting & Other Services), by Application (Onshore and Offshore), and by Region (North America, Europe, Asia Pacific, Latin America, the Middle East, and Africa) published by Coherent Market Insights.
Increasing population is leading to high demand for energy, which in turn is propelling demand for new oil fields in the market. Several companies are investing in exploration of new oil fields to increase their profit margins, sustain in the competitive market, and gain a competitive advantage in the market. For instance, in March 2017, Repsol S.A. — a Spain-based oil producer— along with its privately-held partner— Armstrong Energy, Inc.— announced new oilfield discovery of conventional oil in Alaska's North Slope. Moreover, in July 2018, China National Petroleum Corporation (CNPC) and Sinopec— as part of a government initiative to boost domestic energy supply— are raising investments to increase local oil and gas production and are also accelerating drilling at tight oil and gas formations in western China. Therefore, increasing oilfield discoveries are expected to fuel demand for directional drilling services, thereby boosting the market growth.
Directional drilling industry has experienced a rapid paradigm shift in the recent past, due to technological advancements in directional drilling. Drilling technique has gained significant traction in the oilfields worldwide, owing to its use in drilling inaccessible surface locations and multiple wells from single location and in hitting multiple target zones. For instance, in September 2018, the Ditch Witch Organization launched JT20XP directional drill package that is featured with JT20XP drill and XP44 mixing system. This system offers a productive solution for larger jobs, while retaining a small, compact footprint and offers superior productivity for larger utility-installation jobs.
Technological advancements in directional drilling such as measurement while drilling (MWD) and logging-while-drilling (LWD) are increasing being preferred by service providers and are expected to contribute to the market growth. For instance, in June 2017, Motive Drilling Technologies, Inc. designed an automated decision-making through the directional drilling bit guidance system and applied it to 2 million feet drillings for oil and gas drilling companies in North America to offer better efficiency and accuracy in time.
However, stringent regulatory policies and increasing environmental concerns are expected to restrain the market growth over the forecast period. Increasing use of directional drilling has led to growing concerns about its potential impacts on public health and the environment, including impacts arising from improper management of oil waste from offshore exploration and production activities. For instance, in October 2016, the Environmental Protection Agency (EPA) finalized an air pollution standards for natural-gas drilling to reduce harmful air pollution from the oil and natural gas industry. Stringent government regulatory policies such as for protecting the environment (including air and water quality), cultural resources, and workers’ and the public’s health and safety, and for reducing wastage of resources are expected to hamper the market growth.
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