Underbalanced Drilling Market Size to grow at a CAGR of 5.24% To 2024

Posted by Mayur Yeole on March 26th, 2021

According to Market Research Future (MRFR), the global underbalanced drilling market size is estimated to grow at 5.24% CAGR from 2019 to 2024 (forecast period). The report evaluates the effects of the COVID-19 pandemic on the global underbalanced drilling market and offers a detailed estimation of the anticipated volatility of demand over the forecast period.

Underbalanced drilling is a type of drilling process used to drill oil and gas wells. In this process, the pressure of the well is held lower than the pressure of the formations that are being drilled. This varies from traditional over-balanced drilling in which the circulating pressure of the bottom hole is lower than the formation pressure, allowing the well to flow while the drilling is proceeding. This approach is known to be appropriate for reducing the problems of invasion formation. Since the majority of hydrocarbons are found in existing fields with depleting pressures or in complicated and low-quality reservoirs, the economical use of underbalanced drilling is becoming increasingly prevalent. In addition, underbalanced drilling services provide reliable pressure control services that help deliver high-performance drilling solutions.

Market Dynamics

Factors responsible for the growth of the global underbalanced drilling market include growing demand for crude oil due to rapid urbanization, rising exploration and drilling activities, and the discovery of new oil and gas deposits. In addition, numerous oil and gas operators are investing in the oil and gas sector due to the rise of crude oil prices. Moreover, the expected high growth of underbalanced drilling is due to the potential for higher penetration rates, growing concerns about damage to formation, and the ability to minimize lost circulation in depleted reservoirs. In addition, the recent increase in drilling and completion activities also provides a growth opportunity for the global underbalanced drilling industry.

Furthermore, the global underbalanced drilling market is anticipated to develop at a high rate during the forecast period due to the immediate need to increase productivity and minimize drilling damage. Oil and gas companies are investing heavily in advanced technologies, including underbalanced drilling, which improves the efficiency of the drilling process and provides cost savings in the digital transformation of the oil and gas industry. As per the IEA, the oil market is expected to rise by 6.9 million barrels per day by 2023. As a result, governments around the world have developed attractive investment plans to increase their refining capacity, which would further fuel global market growth. For example, in 2018, Indian Oil Corporation announced plans to invest about USD 24.83 billion to increase its refinery and drilling capacity, boost its petrochemical production, expand its gas business and develop its drilling process. Likewise, in May 2018, Abu Dhabi National Oil Company spent USD 45 billion to expand its plant to one of the largest refining and petrochemical plants globally, increasing its refining capacity by 65% to 1.5 billion barrels per day by 2025. Such investments will, in effect, push the need for efficient drilling techniques in the refinery, thereby boosting the underbalanced drilling industry.

Market Segmentation

The global market for underbalanced drilling has been segmented based on technique and application.

Based on the technique, the global market has been segmented into lightweight drilling fluids, gas injection, and foam injection. The foam injection segment is anticipated to lead the global market as it delivers efficiency during the well-hole cleaning process. As a consequence, it is known to be the most favored underbalanced drilling technique.

Based on the application, the global market has been segmented into onshore and offshore segments. The offshore segment is expected to rise with the highest CAGR during the forecast period due to increased exploration activities in deep and ultra-deep-sea regions.

Regional Analysis

Regionally, the global underbalanced drilling market has been segmented into Asia Pacific, North America, Europe, the Middle East & Africa, and Latin America.

North America has the largest share in the underbalanced drilling market owing to the discovery of shale gas deposits in the US and the involvement of a significant number of private oil companies.

Key Players

Air Drilling Associates Inc. (US), National Oilwell Varco (US), Ensign Energy Services (Canada), Schlumberger Limited (US), Halliburton Inc. (US), Weatherford International (US), STRATA Energy Services (Australia), Kinley Exploration LLC (US), Beyond Energy (Canada), Precision Air Drilling Services Inc. (US)