Growing demand for crude oil and natural gas has been prompting exploration and production companies to get involved in extensive drilling activities. The global rig count (including both land and offshore rigs) was 2,304 units in 2009 which saw an upward trend the following year to 2,985. This increase was primarily fueled by stabilization of the global economic condition which saw a downturn in 2009. The global rig count increased further to reach 3,465 units in 2011 and was recorded to be 3,419 units as of May 2013. Within another 6-7 month, this number is expected to reach a higher level by the end of 2013. With growing number of drilling activities continuously taking place in these accounted land and offshore rigs, the global market for drilling fluids is expected to witness consistent demand over the forecast period.
There have been extensive deep water discoveries of oil and gas around the world. The “Golden Triangle” of deep water namely the U.S. Gulf of Mexico (USGOM), offshore West Africa and offshore Brazil accounted for approximately 85% of the total expenditure in 2012. However, Asia as a deep sea drilling region is one of the most attractive regions for investment and accounted for approximately 10% of the total expenditure in 2012. Hence, the demand for drilling fluids in these regions is expected to grow along with further activities in these regions. However, one of the major factors inhibiting the global market for drilling fluids is their impact on the environment. EPA limits the use of OBFs in offshore drilling owing to high level of aromatic content in them which poses a serious threat to organisms in sea/oceans. Drilling fluids create various environmental hazards during usage and disposal which directly affects flora and fauna and indirectly affects humans. OBFs contain diesel oil and mineral oil which when used and disposed off into the environment cause hazards to both land and sea animals.
Drilling fluids are classified as oil-based fluids (OBF), water-based fluids (WBF) and –synthetic-based fluids (SBF). WBF emerged as the leading product segment and accounted for 56% of total market revenue in 2013. WBF along with being the largest product segment is also expected to be the fastest growing product segment at an estimated CAGR of 8.8% from 2014 to 2020. Stringent regulatory scenario to minimize the use of OBF is expected to remain a key driving factor for the growth of WBF over the forecast period.
The report segments the application of drilling fluids as offshore oil & gas and onshore oil & gas. Onshore oil & gas emerged as the leading application market for drilling fluids and accounted for 71.6% of total market revenue in 2013. However, owing to increasing investments in U.S. Gulf of Mexico, offshore West Africa and offshore Brazil, offshore oil & gas is expected to be the fastest growing application market for drilling fluids at an estimated CAGR of 8.3% from 2014 to 2020.
North America continued its dominance in the global market and accounted for 55.5% of total market revenue in 2013. Shale gas boom in the U.S. is expected to drive the future market for drilling fluids. However, owing to increasing drilling activities in Brazil and Venezuela, Central and South America is expected to be the fastest-growing region for drilling fluids at an estimated CAGR of 10.3% from 2014 to 2020.
The global market for drilling fluids is highly concentrated with top four companies including Schlumberger, Halliburton, Baker Hughes and Newpark accounting for over 70% of total market in 2013. Some of the other companies operating in the global market include Weatherford International, Tetra Tech, China Oilfield, Canadian Energy Services and Anchor Drilling among some other companies.
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