Offshore Drilling Rigs Global Market – Overview
The Offshore Rig Industry is composed of five fragmented markets. Cash enters the contract drilling services market when the exploration and production (E&P) firms lease rigs from contractors. Contractors use this case to operate their units, acquire new rigs, and upgrade and maintain their fleet. The new build and upgrade markets are the primary mechanisms by which capital leaves the service market. In the contract drilling market, rigs owned and operated by contractors are leased to E&P firms on a day rate basis to drill or service wells. The sustained low oil and gas prices has resulted E&P companies to trim their budgets, thus postponing exploration and production program plans, amid weaker cash flows. During prior periods of high day rates and rig utilization rates, drilling contractors have responded to increased E&P operator demand by increasing the supply of rigs, through the ordering of construction of new units. This growth in new construction led to an oversupply of rigs and has caused a subsequent decline in day rates and rig utilization rates, due to intense competition in pricing among the market players and renegotiation of contracts by E&P companies. As per the study conducted by Market Research Future, the global market for offshore drilling rigs is likely to grow at the CAGR of around 9%.
Oil & Gas industry is one of the major revenue generating industries which has pushed the market for exploration and production activities, where, offshore drilling rigs market is one of them. In other words, the growth in the oil & gas industry will create a positive impact on the market for global offshore drilling rigs. This industry is majorly influenced by the increasing crude oil production. The current oil price dynamics is anticipated to affect the overall industry growth as the declining crude oil price may offset the profit margins of the offshore drilling rigs operators. Offshore drilling is the process, where drilled below the surface and serve operational purposes such as oil exploration and construction work. There are a variety of offshore vessels, which will not only help in the exploration and drilling activities but also supply to the excavation and construction units. Offshore drilling rigs are classified, mainly based on their movability and how deep the sea bed is. The high demand for crude oil, along with the maturing of onshore oil and gas wells is driving the overall offshore drilling rigs activities. Moreover, continuous development of offshore reserves and rising deep water production are likely to positively influence the growth of the global offshore drilling industry. Global oil and gas industry has been seeing a host of exploration and production activities over the past year, especially in West Africa, several countries in the region are planning to carry out diverse oil and gas engineering and procurement activities. Many major and independent firms are taking up upstream operations in the region. The Nigerian National Petroleum Corporation (NNPC) announced that it had secured a USD1.2 billion multi-year drilling financing package to contribute to the running of 36 oil wells across the country. The project is expected to deliver 21,000 barrels of crude condensate per day along with 120 million cubic feet of gas. Moreover, in Liberia, Exxon Mobile Corporation is planning to start oil drilling in its recently found oil reserves by 2018. According to OPEC, world oil demand averaged 93.0 mb/d in 2015, with the highest rises taking place in the Asia Pacific region, particularly India and China, North America, Western Europe, the Middle East and Africa. BP’s outlook for energy industry 2016 identified that, emerging economies account for 58.1% of global energy consumption. Countries such as China and India are recording another robust increase in consumption of oil and gas when compared with rest of the world. Recently, India surpassed Japan as the world’s third largest oil consumer. This poses an opportunity for increased oil drilling operations around the world.
Geographically, the global Offshore Drilling Rigs market has been divided into Americas, Europe and Asia Pacific. Among these regions, North America was the dominating market for specialty oilfield chemicals in 2016. The enormous potentials in the enhanced oil recovery and shale reserves exploration, particularly in Canada and Mexico, are expected to further drive the specialty oilfield chemicals market in North America. On the other hand, the Middle East & Africa is projected to witness the highest growth rate during the forecast period, followed by Latin America and Europe. The active participation of countries such as Saudi Arabia and Iran are expected to propel the high growth for the market. Latin America & Europe is driven by the deep-water and unconventional oil & gas projects that are more challenging and require specialty chemicals for increased productivity.
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Aban Offshore Limited, China Oilfield Services Ltd, Ensco plc, Diamond Offshore Drilling Inc., Vantage Drilling Co., Pacific Drilling, KCA Deutag, Maersk Drilling, Nabors Industries Ltd and Nobel Corporation are some of the prominent players profiled in MRFR Analysis and are at the forefront of competition in the Global Offshore Drilling Rigs Market.
In October, 2017 – Ensco plc (NYSE: ESV) announced the completion of its acquisition of Atwood Oceanics, Inc.
In July, 2017 – GE (NYSE: GE) and Maersk Drilling extended the scope of their digital partnership. The collaboration brings the next big step in innovative efficiency services to the offshore market and constitutes great value for customers by enhancing drilling productivity.
In January, 2017 – China Oilfield Services (COSL), the Chinese dominant offshore oil and gas drilling services provider, plans a substantial increase its revenue contribution from overseas projects in coming years, as it gradually recovers from the worst industry downturn since going public in 2002.
In June, 2016 – Diamond Offshore Drilling, Inc. (NYSE: DO) and Trelleborg’s offshore operation announced a Joint Development Agreement to develop, manufacture and market Helical Buoyancy riser technology developed by Diamond Offshore. This innovative, patented riser buoyancy design reduces riser drag and mitigates Vortex-Induced Vibration in offshore applications and enables improved operational efficiency.
Offshore Drilling Rigs Global Market – Segmentation
The scope of global Offshore Drilling Rigs market is segmented into two major segments which are explained below:
- By Type
- Jackup Rigs
- By Operating Depth
- Shallow Water
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Offshore Drilling Rigs Global Market – Competitive Analysis
The global market for offshore drilling rigs seems to be highly competitive. To maintain the market position and to drive the market growth, various dynamic and diversified international organizations, domestic organizations and as well as new entrants form a competitive landscape. Market leaders are innovating continuously and increasingly seeking market expansion through various strategic mergers and acquisitions, product launch, innovation, increasing investments in research and development and cost-effective product portfolio. Major players are investing on internal R&D and, most of all, in acquiring other firms.
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