Drilling fluids, also known as drilling muds, are specially designed fluids that are used in drilling boreholes into the earth. They are used to help drill bits to cut rock, cool drill bits, carry cuttings to the surface and form thin filter cakes around boreholes. Common types of drilling fluids include water-based muds, oil-based muds, pneumatic drilling muds and foams. They are essential in rotary drilling, workover, completion and well control operations. The oil & gas industry is one of the major end-users of drilling fluids due to increasing upstream activities in exploration and production of oil and natural gas. With growing demand for energy and focus on shale gas exploration, the global drilling fluids market is witnessing significant growth.
The global drilling fluids market is estimated to be valued at US$ 8.43 Bn in 2023 and is expected to exhibit a CAGR of 9.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
This has led to notable increase in exploration and production activities targeting shale reservoirs worldwide. Drilling fluids play an essential role in shale gas drilling operations by forming filter cakes, carrying cuttings, providing hydrostatic pressure etc. Thus, rising shale gas exploration is fueling the demand for specialized drilling fluids.
Another factor propelling the market growth is stringent environmental regulations regarding wastewater disposal. Drilling fluids pose both on-site and off-site environmental challenges during usage and disposal. Hence, regulatory agencies have mandated use of environmentally acceptable, water-based fluids over oil-based varieties. This is promoting development of innovative, low toxicity drilling fluid systems customized for specific drilling applications. Leading manufacturers are focusing on introducing drilling fluids with minimum impact on the environment to comply with stringent norms.
Segment Analysis
The global drilling fluids market is divided into two major segments – water-based fluids and oil-based fluids. Oil-based fluids currently dominate the market and account for around 50% of the share. This is because oil-based fluids perform better than water-based fluids in challenging conditions like drilling through shales and controlling high pressure and temperatures. However, concerns around environmental impact are driving increasing adoption of water-based fluids which are eco-friendly. The water-based fluids segment is expected to grow at a faster pace during the forecast period.
PEST Analysis
Political: Drilling activities are regulated by various environmental laws aiming to reduce pollution. Substantial time and costs are involved in obtaining statutory approvals which impacts market.
Economic: Growth in global oil & gas industry due to rising energy demand drives drilling activities and thereby market demand. However, volatility in crude oil prices poses challenges.
Social: Increasing awareness around environmental protection has led to preference for eco-friendly water-based fluids over oil-based variants.
Technological: Advancements in drilling techniques and development of novel, high performance drilling fluids formulated using customized additives and polymers are expanding application scope.
Key Takeaways
The Global Drilling Fluids Market Size is expected to witness high growth over the forecast period supported by increasing drilling activities worldwide arising from rising energy demand.
Regional Analysis: North America currently accounts for the largest share attributed to high ongoing shale exploration activities in the US and Canada.
Key players operating in the drilling fluids market are Orana Group, AECOM, Babcock International Group Plc, Westinghouse Electric Company LLC, Enercon Services Inc., KDC Contractors Limited, NUVIA Group, Onet Technologies SAS, Sogin S.p.A., and others. Growing unconventional drilling is opening new opportunities for manufacturers to develop customized drilling fluid solutions for complex reservoir conditions.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it