Directional drilling services are primarily used for applications in the oil and gas industry for drilling deviated and horizontal wells. Directional drilling services include measurement-while-drilling (MWD), logging-while-drilling (LWD), rotary steerable systems (RSS), and motors. MWD technology measures inclination, azimuth and wellbore position while drilling. LWD allows data collection and transmission to the surface in real time. RSS provides steering capabilities in any direction. Motors provide rotation to drill bits. Digital technologies are allowing service operators to monitor drilling operations online/digitally to improve effectiveness and efficiency.
The global directional drilling services market is estimated to be valued at US$ 9.58 Bn in 2024 and is expected to exhibit a CAGR of 9.2% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
One of the key drivers for the directional drilling services market is the increasing adoption of online/digital monitoring technologies. Online monitoring allows operators to monitor drilling operations in real-time from remote locations. It helps detect deviations early and make corrections to ensure wells are drilled as per plan. This improves drilling accuracy and reduces non-productive time. Digital monitoring technologies also optimize equipment performance and enhance efficiency. The ability to monitor operations digitally as highlighted in the heading is thus expected to boost demand for directional drilling services over the forecast period. Additionally, growing complexity of oil and gas reservoirs has increased the need for directional drilling to optimize productivity from hard-to-reach reserves. This is also expected to drive the market during the forecast period.
Segment Analysis
The directional drilling services market is dominated by the oil & gas segment with over 70% market share. Oil & gas production activities require directional drilling techniques to extract oil and gas from reservoirs located deep underground or beneath obstacles. Directional drilling helps in drilling multiple boreholes from a single drilling well thus minimizing the surface infrastructure required. This proves cost-effective for oil & gas companies especially involved in offshore production activities.
PEST Analysis
Political: Favorable government policies are supporting oil & gas E&P activities globally which is positively impacting the demand for directional drilling services. However, stringent regulations regarding well planning and disposal of drilling waste pose certain challenges.
Economic: Volatility in oil prices affects upstream capital expenditure of oil & gas companies. However, with rising energy demand and focus on unconventional resources, spending on directional drilling is expected to rise in the long term.
Social: Growing population and urbanization are driving the demand for energy. This necessitates greater production from existing reservoirs using advanced drilling techniques like directional drilling.
Technological: Continuous innovation is taking place in directional drilling equipment with the development of compact and flexible motors, rotary steerable systems etc. Automation and usage of IoT solutions are also gaining traction.
Key Takeaways
The Global Directional Drilling Services Market Growth is estimated to be valued at US$ 9.58 billion in 2024 and is expected to exhibit a CAGR of 9.2% over the forecast period 2024 to 2031.
The global directional drilling services market is expected to witness high growth over the forecast period supported by rising oil & gas E&P activities globally especially in North America and Middle East regions. The Middle East region currently dominates the market owing to large offshore & onshore reserves in GCC countries requiring complex drilling solutions. North America is the second largest market for directional drilling services driven by shale reserves in the US requiring horizontal and multi-lateral well construction. Rising oil production from Alberta oil sands in Canada is also fueling demand.
Key players analysis:
Key players operating in the directional drilling services market are B. Braun Melsungen AG, Fresenius Kabi, and Ambu A/S. B. Braun is one of the leading providers of directional drilling motors used in challenging oil & gas drilling projects across the globe. Fresenius Kabi supplies measurement-while-drilling systems for accurate well placement.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it