Market Trends of North America Drilling Industry
This section covers the major market trends shaping the North America Drilling Market according to our research experts:
United States would dominate the geographical segment
- The United States is expected to be one of the largest markets for drilling services, mainly due to the increasing number of wells being drilled and fracked in the shale and tight reserves, which is supported by the low breakeven price of the basins.
- With the ongoing war between Ukraine and Russia, companies producing Oil and Gas in the United States witnessed record-breaking profits and are in line to make tens of billions in additional profits. For instance, Chevron is expected to make a potential of an additional USD 6.5 to USD 7.5 billion if the price of oil averages at USD 120 billion, which directly aids drilling operations in the country.
- For instance, in 2021, the United States government reopened the land to develop oil and gas fields to meet the global demand for oil and natural gas and deal with high prices in the United States, which would aid the market.
- Overall, increasing crude oil prices and government support would aid the United States, Drilling Market.
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Offshore is the most viable option to recover hydrocarbons
- The North American region has one of the most well-developed offshore oil and gas industries globally, with the primary areas of focus being the vast reserves in the Gulf of Mexico and offshore Alaska region. As drilling depths have increased over the years, the volume of technically recoverable reserves has increased significantly, which, in turn, attracted significant investments in the region's offshore oil and gas industry.
- As the United States invested heavily in expanding its oil and gas production capacity, the Gulf of Mexico has become a global hotspot for offshore drilling. As of 2021, the Gulf of Mexico region is responsible for 97% and 15% of the US offshore and total hydrocarbon production, respectively. The region has one of the highest global densities of offshore oilfield services.
- Several incentives for shallow-water drilling have been provided in the past by the United States, such as low royalty rates and also modifications for the already leased shallow-water fields, such as decreasing royalty from 18% to 12.5%, with an aim to increase the E&P activities in shallow waters.
- The 32 shallow water blocks received bids in Sale 251 in August 2018, which drove the growth of the market studied. GOM lease sales held in August 2019, Lease Sale 253, generated USD 174.9 million in high bids for 151 tracts covering 835,006 acres in federal waters. Therefore, with increased bidding in the last few years, the market is expected to be moderately driven during the forecast period, majorly in the Central and Eastern regions.
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