The global drilling fluids market size was valued at USD 8.0 billion in 2019 and is projected to register a CAGR of 4.2% from 2020 to 2027. Growing demand for crude oil and natural gas in various energy-intensive industries such as power generation, manufacturing, and transportation has urged exploration and production companies to increase their investments in onshore and offshore drilling activities.
Recovery in oil prices in 2017 and 2018 positively impacted the oil and gas market around the world. Drilling activities around the world witnessed a significant boost with an increase in the average global oil rig count which was recorded to be around 2,211 in 2018, as compared to the average global oil rig count of 1,593 in 2016. Moreover, increasing efforts taken to sustain the energy demand mainly from North America and Europe, coupled with the growing number of deepwater discoveries in the Persian Gulf and Pacific regions, is projected to drive the demand for drilling fluids over the forecast period.
The U.S. government has been investing in several unconventional oil and gas drilling projects in order to boost economic production from fossil fuels. For instance, in January 2018, the United States Department of energy directed funds worth $30 million for R&D activities for unconventional shale development. This has resulted in an increased demand for drilling fluids in the country.
However, growing concerns regarding the environmental impact associated with the disposal of waste drilling fluids has urged regulatory bodies in various regions of the U.K., Norway, Australia, the U.S., Saudi Arabia, and Canada to issue stringent regulations regarding the disposal and treatment of waste drilling fluids. OSPAR Commission, wherein 15 governments and the EU co-operate to protect the marine environment of the North-East Atlantic, has laid procedures regarding the discharge of waste water-based fluids (WBF) and oil-based fluids (OBF) in U.K. and Norway. Furthermore, the National Oceanic and Atmospheric Administration and Canadian Association of Petroleum Producers have issued strict guidelines for the disposal of waste drilling fluids in North America.
In addition, companies have been extensively involved in R&D activities to develop bio-based drilling fluids derived from vegetable oils. Increasing environmental concerns owing to harmful effects associated with using oil-based fluids are leading to growing adoption of water-based drilling fluids. Increasing environmental, health, and safety concerns regarding mud discharge and disposal of cuttings are expected to hamper the market growth over the forecast period. Manufacturing companies are hence shifting their focus on developing new solutions based on nanotechnology to overcome technological and environmental challenges.
Water-based fluids emerged as the largest product segment with a share of more than 51.0% in 2019. These fluids are estimated to witness increased penetration and growth rate on account of cost-effectiveness and lower environmental impact of the discharged cuttings and mud. The rising focus on improving the inhibitive and thermal performance of water-based systems in order to compete with non-aqueous fluids used for challenging applications such as offshore and onshore shelf operations is anticipated to drive the demand for water-based fluids over the forecast period.
Synthetic-based fluids are anticipated to register a significant growth rate on account of their ability to provide excellent thermal stability, borehole control, penetration rates, and lubricity, which help in reducing the overall costs. The oil-based fluids segment is projected to witness a comparatively lower growth rate over the forecast period owing to the adverse environmental impact associated with waste discharge.
Other drilling fluids include foams, mist, gas, dust, aerated liquid, and nitrogen membrane. These fluids find application in low-density drilling medium where hard and dry formations produce few formation liquids. Owing to lower maintenance costs and reduced lost circulation, the other drilling fluids segment is expected to register a significant growth rate over the forecast period.
Onshore was the largest application segment with a share of over 60.0% of the global market in 2019. Increasing number of oil drilling activities in order to fulfill growing energy needs is anticipated to drive the product demand over the forecast period. In addition, increasing upstream spending to meet oil production targets is expected to drive the oil and gas market, subsequently driving the demand for drilling fluids.
On the other hand, the offshore segment is projected to witness the highest growth rate over the forecast period. Recovery in oil prices has led to an increase in oil exploration activities in offshore oil fields. For instance, a yearly increase of around 23.0% was witnessed in operational offshore rigs in January 2019 as compared to a 2.0% increase witnessed for onshore rigs for the same period. Furthermore, growing demand for the mud in deep water, harsh environments, and remote locations is expected to drive the demand for drilling fluids for offshore applications. Increased maintenance costs and environmental risks associated with offshore locations have urged companies to deploy synthetic- or water-based fluids for cost-efficient exploration and production activities.
North America dominated the global drilling fluids market in 2019 owing to factors such as the shale boom and growing offshore drilling activities in the Gulf of Mexico. The surge in finding untapped oil and gas reserves is expected to drive the regional market growth over the forecast period. Large reserves of unconventional hydrocarbon reserves in the form of shale gas, tight oil, and oil sands coupled with high investments from multinational oil and gas companies such as Suncor Energy, Husky Energy, Shell, Imperial Oil, Cenovus, and ExxonMobil, is expected to increase drilling activities in the region over the forecast period.
Middle East is anticipated to witness growth owing to developments in offshore activities such as contract signature and increasing oil production in various regions, including Iran and Qatar. This is further anticipated to drive offshore exploration and production activities in the region over the forecast period. Additional factors such as revival of abandoned oil wells in the Persian Gulf and selling ongoing rig operations are expected to drive offshore oil and gas production in the region.
The Asia Pacific market is expected to witness significant growth on account of the rise in the exploration of oil fields from untapped reserves. For instance, Australia, Pakistan, Brunei, Papua New Guinea, and Malaysia are some of the major countries which have untapped offshore oil reserves.
Key market players in the global market include Baker Hughes, Newpark Resources, Halliburton, National Oilwell Varco Weatherford International, and Schlumberger. These companies offer a diverse portfolio of drilling fluids in terms of both, products and services for operator companies and are highly integrated across the value chain.
Companies are increasingly focusing on developing technology-based products owing to the growing industrial demand for advanced technology for drilling purposes. Manufacturing companies focus on batch testing and field service, which can support application problems and opportunities. For instance, in May 2019, Baker Hughes launched DELTA-TEQ, a drilling fluid with a low-pressure impact. It is a type of non-aqueous drilling mud formulation which enables operators to work in narrow pressure windows by reducing hydraulic impact and minimizing risks.
Base year for estimation
Actual estimates/Historical data
2016 - 2018
2020 - 2027
Revenue in USD Million and CAGR from 2020 to 2027
North America, Europe, Asia Pacific, Middle East, Africa, and Central & South America
U.S., Canada, Mexico, U.K., Russia, Norway, Azerbaijan, Kazakhstan, China, India, Indonesia, Malaysia, Pakistan, Myanmar, Singapore, Australia, Vietnam, Thailand, Brazil, Argentina, Venezuela, Columbia, Peru, Saudi Arabia, UAE, Qatar, Kuwait, Iran, Iraq, Algeria, Libya, Nigeria, Gabon, Zaire
Revenue forecast, company share, competitive landscape, growth factors and trends
15% free customization scope (equivalent to 5 analyst working days)
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This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global drilling fluids market report on the basis of product, application, and region:
Product Outlook (Revenue, USD Million, 2016 - 2027)
Oil-based fluids (OBF)
Water-based fluids (WBF)
Synthetic-based fluids (SBF)
Application Outlook (Revenue, USD Million, 2016 - 2027)
Regional Outlook (Revenue, USD Million, 2016 - 2027)
Central & South America
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