Market Trends of Polycrystalline Diamond Compact (PDC) Drill Bit Industry
This section covers the major market trends shaping the Polycrystalline Diamond Compact Drill Bit Market according to our research experts:
The Onshore Segment to Dominate the Market
Onshore drilling encompasses all the drilling sites located on dry land and accounts for 70% of the global oil production. Onshore drilling is similar to offshore drilling but without the difficulty of deep water between the platform and the oil.
The global crude oil prices witnessed signs of recovery and are improving at a good pace and the onshore projects are easier to kick start than offshore projects. Therefore, riding on the optimism associated with the recovery of crude oil prices, onshore projects are expected to record significant growth over the forecast period. This, in turn, is expected to drive the demand for PDC drill bits.
In August 2018, Baker Hughes was awarded a development contract by Cairn, Vedanta Limited, to construct approx. 300 new wells and deploy a chemical enhanced oil recovery program aimed at increasing production from the Rajasthan area. The project marks the largest integrated project for BHGE in India, expanding its presence in the country and supporting the government's mission of reducing dependency on imports.
In 2019, ONGC announced that it allotted INR 6,000 crore for drilling 200 wells in Assam over the next seven years, to increase the output from the state. The wells are expected to be drilled during the next seven years.
Hence, with the new investment in the onshore oil and gas industry, increasing exploration of unconventional resources, and the crude oil price stability, the demand for PDC drill bits is expected to increase during the forecast period.
North America to Dominate the Market Growth
North America is expected to be the largest market for PDC drill bits, owing to the large chunk of activities for shale gas exploration in the region. Over the past decade, the lateral lengths of the unconventional wells drilled in the United States, increased by 180%.
The United States, as of 2019, is the largest producer of oil and gas. 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. In 2018, the United States witnessed three significant oil discoveries, including two in the Gulf of Mexico, at Ballymore (545 Mb) at a depth of 2,000 m underwater, and at Appomattox (140 Mb) under 2,300 m of water.
According to the Canadian Government, in 2018, oil production from Canada is anticipated to reach 4.5 mmbpd by 2020, and the production is expected to increase from an offshore well situated in the West Orphan Basin, offshore Newfoundland, and Labrador, which is estimated to hold 25.5 bbl of oil and 20.6 tcf of gas.
The annual oil output of Mexico has been declining over the years, due to drying up of the giant Cantrell field in the shallow waters of the Gulf of Mexico. However, the Mexican government is trying to increase private investments in its controlled areas of the Gulf of Mexico.
Therefore, increasing oil and gas exploration and production activities and the increasing unconventional development activities in the region are expected to increase the demand for PDC drill bits over the forecast period in the North American region.
