North America Directional Drilling Services Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR | > 4.50 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
North America Directional Drilling Services Market Analysis
The North America directional drilling services market is expected to register a CAGR of more than 4.5% during the forecast period 2022-2027. The COVID-19 outbreak witnessed a severe impact on the market due to stringent lockdown protocols implemented by respective governments of the countries in North Ameria. Factors such as drilling in unconventional reserves, which involves directional or horizontal type drilling to increase contact with the pay zone along with increasing the production is expected to drive the directional drilling services market in North America during the forecast period. However, the high volatility of crude oil prices and low-price scenarios (operators cut-down the drilling and porduction activities) in countries like United States, Canada, etc. is expected to hinder the market growth during the forecast period.
- Offshore segment is expected to witness significant growth during the forecast period, owing the cost of operation in the offshore locations declining significantly over the past few years. This factor is encouraging the industry to step up its expenditure gradually in the future and drive the directional drilling services market in North American region.
- Factors, such as technological improvements and increasing viability of deepwater and ultra-deepwater projects, several new markets, such as Gulf of Mexico is actively promoting the development of deepwater and ultra-deepwater reserves. This, in turn, is expected to create significant opportunities for the operating countries in the near future.
- United States is expected to continue its dominance for directional drilling services market in North American region during the forecast period.
North America Directional Drilling Services Market Trends
This section covers the major market trends shaping the North America Directional Drilling Services Market according to our research experts:
Offshore Segment Expected to Witness Significant Demand
- Directional drilling services are significantly used in the offshore sector, because majority of the wells in the offshore sector are drilled from a single drilling rig in order to save costs. Also, the extended reach wells and horizontal wells are usually used to develop the offshore oil and gas fields, mainly due to the required number of platforms can be reduced. The demand for directional drilling services in the offshore sector are expected to witness significant growth during the forecast period, mainly driven by increasing investments in the sector and upcoming exploration and production activities in the offshore segment.
- As of 2021, the offshore oil and gas industry accounted for about 15.2% of the United States' crude oil production. The Gulf of Mexico is the major offshore oil and gas producing region in North America.
- The offshore oil and gas drilling sector had been subdued in the past few years, mainly due to the crude oil price being lower than the breakeven price of several offshore oil and gas fields. As a result, the demand for directional drilling has been negatively impacted.
- The brent crude oil prices started showing signs of improvement after mid-2016 and remained well above USD 60 per barrel throughout 2018 (except December 2018). This, coupled with the cost reduction program of upstream oil and gas companies, resulted in gaining the confidence of investors for final investment decisions for projects, which got canceled during the low commodity price environment.
- With the rising number of maturing onshore oilfields in the recent years, there has been growth in the offshore exploration and production (E&P) activities. The Permian Basin of United States is the most important basin in terms of crude oil production in the country, although the production from old wells has started to decline, and there is little scope for new discovery in these areas. As a result, the oil and gas industry is shifting toward deeper regions in search of oil and gas, in order to meet the increasing demand.
- Therefore, based on the above-mentioned factors, offshore segment is expected to witness a significant growth in the North America directional drilling services market during the forecast period.
United States to Dominate the Market
- The United States, as of 2021, was the largest producer of oil and gas across the globe. In the United States, there are more than 900,000 active oil and gas wells, and more than 130,000 have been drilled since 2010. The United States has one of the largest technically-recoverable shale gas reserves, and the second-largest tight oil reserves in the world. The technological development in the hydraulic fracturing and low breakeven prices have supported the oil and gas directional drilling activities in the region.
- According to the United States Geological Survey (USGS), over 46 billion barrels of oil, 280 trillion cubic feet of gas, and 20 billion barrels of natural gas liquids are trapped in the low-permeability shale formations of the United States, as of 2021. To fulfil the increasing demand for oil and gas, these fields are likely to be explored and produced.
- The oil and gas companies in the country have successfully deployed their technologies, also to exploit the shale reserves in the country and achieve the ambitious goal of becoming a net exporter of energy in the coming years. Each unconventional well, on an average, is being drilled with longer lateral well sections, or laterals, and more hydraulic fracturing stages per lateral length.
- Modern hydraulic fracturing, combined with horizontal drilling, allows multiple wells to be drilled from a single spot. This practice not only increases the drainage area significantly but also reduces the required surface drilling area above, by as much as 90%, in turn, reducing the cost of drilling per barrel of oil produced.
- The combination of horizontal drilling and hydraulic fracturing increased the production of crude oil, lease condensate, and natural gas in the country over the past few years. Hydraulically fractured horizontal wells have accounted for most of all the new wells drilled and completed across the country.
- Advancements in hydraulic fracturing and horizontal completions have made shale gas wells more profitable. Shale gas is estimated to account for about 46% of the total natural gas supply in the United States, by 2035. Horizontal drilling is often used for shale gas reserves, with lateral lengths up to 20,000 feet within the shale. Thus, the increasing demand for unconventional reserves, such as shale plays and tight oil, is expected to boost the demand for directional drilling, during the forecast period.
- Therefore, based on the above-mentioned factors, United States is exoected to dominate the North America directional drilling services market during the forecast period.
North America Directional Drilling Services Industry Overview
The North America directional drilling services market is moderately fragmented. Some of the major players include Schlumberger NV, Weatherford International PLC, Halliburton Company, Baker Hughes Company, and KLX Energy Services Holdings, Inc.
North America Directional Drilling Services Market Leaders
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Weatherford International plc
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Halliburton Company
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Baker Hughes Co
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KLX Energy Services Holdings, Inc.
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Schlumberger NV
*Disclaimer: Major Players sorted in no particular order
North America Directional Drilling Services Market News
- In November 2021, Nabors Industries Ltd came into a contractual agreement with Chesapeake Energy Corporation to choose Nabors as the preferred drilling contractor for the oil and gas projects in the United States. This agreement is likely to enable the company to expand its business portfolio across the country.
- In August 2021, Michels Canada extended the limits of trenchless construction in Canada by using horizontal directional drilling (HDD) to complete a 3540 m crossing in Burlington, Ontario, under the Hidden Lake Golf Club. The installation is part of Imperial's Waterdown to Finch Project, a proactive replacement of approximately 63 km of the Sarnia Products Pipeline between the Waterdown pump station in rural Hamilton and the storage facility in Toronto's North York area. The Hidden Lake HDD is the longest successful HDD installation in Canada to date, surpassing the previous record of 2195 m, also set by Michels Canada.
North America Directional Drilling Services Market Report - Table of Contents
1. INTRODUCTION
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2. EXECUTIVE SUMMARY
3. RESEARCH METHODOLOGY
4. MARKET OVERVIEW
4.1 Introduction
4.2 Market Size and Demand Forecast in USD billion, till 2027
4.3 Upstream Oil & Gas CAPEX Analysis, North America, till 2027
4.4 Recent Trends and Developments
4.5 Government Policies and Regulations
4.6 Market Dynamics
4.6.1 Drivers
4.6.2 Restraints
4.7 Supply Chain Analysis
4.8 Porter's Five Forces Analysis
4.8.1 Bargaining Power of Suppliers
4.8.2 Bargaining Power of Consumers
4.8.3 Threat of New Entrants
4.8.4 Threat of Substitutes Products and Services
4.8.5 Intensity of Competitive Rivalry
5. MARKET SEGEMENTATION
5.1 Location of Deployment
5.1.1 Onshore
5.1.2 Offshore
5.2 Type
5.2.1 Rotary Steerable System (RSS)
5.2.2 Conventional
5.3 Geography
5.3.1 United States
5.3.2 Canada
5.3.3 Rest of North America
6. COMPETITIVE LANDSCAPE
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Companies Profiles
6.3.1 Schlumberger NV
6.3.2 Weatherford International plc
6.3.3 Halliburton Company
6.3.4 Baker Hughes Company
6.3.5 Scientific Drilling International Inc. (SDI)
6.3.6 KLX Energy Services Holdings, Inc.
6.3.7 PHX Energy Services Corp.
6.3.8 Gyrodata Inc.
6.3.9 Nabors Industries Ltd.
6.3.10 Leam Drilling Systems Inc.
7. MARKET OPPORTUNITIES and FUTURE TRENDS
North America Directional Drilling Services Industry Segmentation
The North America directional drilling services market report includes:
North America Directional Drilling Services Market Research FAQs
What is the current North America Directional Drilling Services Market size?
The North America Directional Drilling Services Market is projected to register a CAGR of greater than 4.5% during the forecast period (2024-2029)
Who are the key players in North America Directional Drilling Services Market?
Weatherford International plc, Halliburton Company, Baker Hughes Co, KLX Energy Services Holdings, Inc. and Schlumberger NV are the major companies operating in the North America Directional Drilling Services Market.
What years does this North America Directional Drilling Services Market cover?
The report covers the North America Directional Drilling Services Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the North America Directional Drilling Services Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
North America Directional Drilling Services Industry Report
Statistics for the 2024 North America Directional Drilling Services market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. North America Directional Drilling Services analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
