Offshore Drilling Market Size, Share, Trends, Growth 2032

Offshore Drilling Industry Prospective:

The global offshore drilling market size was worth around USD 35.10 billion in 2023 and is predicted to grow to around USD 74.99 billion by 2032 with a compound annual growth rate (CAGR) of roughly 8.80% between 2024 and 2032.

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Offshore Drilling Market: Overview

Offshore drilling refers to the mechanical process of drilling into the sea bed with the aim to access oil & gas stored beneath the ocean floor. While in most cases, offshore drilling is often associated with drilling activities that are carried out in large water bodies such as continental shelf, however, it can also be associated with smaller water bodies such as inland seas and lakes. Offshore drilling has severe environmental implications and hence the industry is heavily monitored by environmental agencies and government bodies. The overall expenses associated with offshore drilling are extremely high mainly due to the intense environment in which these operations are carried out. In recent times, there have been several concerns raised by environmental bodies against offshore drilling and hence the business remains one of the relatively lesser explored industries across the globe.

However, several oil & gas giants have shown interest in exploring the industry further to meet the rapidly evolving demands of the commercial world. Offshore drilling involves a multitude of complex steps and the entire process may take an extensive period before completion. The forecast period may hold several growth opportunities for the players in the offshore drilling industry but they will also have to deal with multiple challenges and growth limitations.

Key Insights:

• As per the analysis shared by our research analyst, the global offshore drilling market is estimated to grow annually at a CAGR of around 8.80% over the forecast period (2024-2032)
• In terms of revenue, the global offshore drilling market size was valued at around USD 35.10 billion in 2023 and is projected to reach USD 74.99 billion by 2032
• The market is projected to grow at a significant rate due to the growing initiatives undertaken by regional governments to promote offshore drilling.
• Based on water depth segmentation, the deepwater segment is projected to swipe the largest market share.
• Based on rig type segmentation, the jackups segment is expected to dominate the global market during the forecast period.
• On the basis of region, Asia-Pacific is growing at a high rate and is projected to dominate the global market.

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Offshore Drilling Market: Growth Drivers

Growing initiatives undertaken by regional governments to promote offshore drilling may impact the market growth rate

The global offshore drilling market is expected to grow owing to the increasing number of governments across the globe launching and implementing policies that promote offshore drilling. The rising urbanization and industrialization rate have led to higher consumption and subsequent demand for essential fuel. Most companies and economies currently supplying oil & gas deal in onshore measures such as land-based resources. However, the continuous supply of essential fuel has been interrupted in the last few years, especially since the beginning of the Russia-Ukraine war. It has been further impacted by violent activities carried out between Israel and Hamas in the Middle East region. As per official projections in October 2023, the Israel-Hamas war caused an undermining in the global oil supply chain.

In 2023, the oil prices reached around USD 83 per barrel. The changing fuel prices directly impact other businesses thus affecting the consumers in the end. Governments globally are working toward exploring new means of extracting oil & gas. Some countries have initiated multiple in-house programs to develop new research wings specially dedicated to oil & gas exploration thus trying to reduce dependence on international oil suppliers. For instance, in October 2023, South Africa provided the much-anticipated approval to TotalEnergies allowing them legal rights to conduct offshore drilling activities off the Cape Coast area. In February 2024, Nigeria announced its plan to open new offshore oil blocks for auction in the coming years. Similar trends have been observed in other parts of the world, especially in developing economies.

Offshore Drilling Market: Restraints

Environmental concerns associated with offshore drilling will restrict market expansion

The global offshore drilling market is expected to be restricted due to the severe environmental concerns associated with offshore drilling activities. Greenhouse gas emissions are one of the leading problems that environmental agencies are most concerned about in terms of offshore drilling. Additionally, the marine ecosystem becomes exposed to harmful chemicals leading to disruption in marine ecology.

Another problem area related to offshore drilling is seismic blasting. This process is used to find fossil fuel reserves beneath the ocean bed. Seismic blasting causes man-made sound above 250 decibels thus disturbing the neighboring areas. Environmental agencies have initiated multiple programs globally to raise awareness about the ecological impact of offshore drilling. They have been carrying out several programs to discourage deepwater exploration activities thus limiting market expansion.

Offshore Drilling Market: Opportunities

Rising interest toward hydrocarbon as an efficient fuel will attract more revenue in the coming years

The global industry for offshore drilling is likely to register high growth opportunities due to the increasing interest of regional governments and private companies in exploring the applications of hydrocarbons. They are integral parts of the global petrochemical industry since hydrocarbons are used in the production of explosives, fibers, plastics, and industrial chemicals. Hydrocarbons are considered as the main energy source globally.

In February 2024, Indian Oil Corporation (IOC) and Oil & Natural Gas Corporation (ONGC) along with other Public Sector Undertakings (PSUs) announced their plans to invest INR 1.2 lakh crore in the coming fiscal year. The entire investment will be directed toward pipelines, petrochemicals, refineries, and oil & gas exploration.

Integration of new technologies such as robotics and artificial intelligence (AI) will reflect positively toward the market growth rate

The global offshore drilling market is projected to benefit from the increasing investment toward the introduction of new technologies such as AI and robotics for use toward improving offshore drilling activities. These engineering tools can be used for optimizing drilling undertakings.

Furthermore, artificial intelligence can be used to remotely monitor offshore equipment and pipelines without putting human lives in danger. The introduction of robotics in offshore drilling will aid in improved results, especially in areas that are beyond human reach at current times.

Offshore Drilling Market: Challenges

High cost of investments and other expenses will challenge market expansion

The global offshore drilling industry is expected to be challenged during the forecast period due to the high cost of investment required to start and implement such massive-scale projects. Currently, only selective players in the market have access to essential assets and other resources.

Most offshore drilling projects demand millions of dollars as initial investment and the cost of other resources including manpower continues to rise with every passing year. The cost implications of offshore drilling on the environment remain under question as offshore drilling is considered a leading reason for severe climate changes and weather conditions.

Offshore Drilling Market: Segmentation

The global offshore drilling market is segmented based on water depth, rig type, and region.

Based on water depth, the global market is divided into deepwater, shallow water, and ultra-deepwater. In 2022, the highest growth was witnessed in the deepwater segment. The majority of offshore drilling currently occurs in the Gulf of Mexico. The area hosts several oil & gas exploration platforms that are operating in water depths as deep as 6,000 feet. Drilling that occurs below 1500 m is known as deepwater drilling. The shallow variant is a leading revenue generator and generally occurs relatively close to the coastline. Deepwater drilling is technically challenging and requires intensive investments.

Based on rig type, the global market is divided into jackups, semi submersibles, and drillships. In 2022, the highest demand was registered in the jackups segment. This type of rig stands on supporting legs and can be elevated as per desired height. The entire machinery can be easily transported from one location to another and offers cost-efficiency as compared to other forms of drilling rigs. The cost of constructing and installing a 122-m jack-up rig may reach as high as USD 300 million.

Offshore Drilling Market: Report Scope

Offshore Drilling Market: Regional Analysis

Asia-Pacific has the highest potential to grow during the forecast period

The global offshore drilling market will be led by Asia-Pacific during the forecast period. Countries such as Australia, China, and India are expected to lead the regional revenue in the coming years. The growing energy requirements as well as the rising investments toward developing domestic industries are likely to fuel regional expansion in the coming years. Since China and India are a part of the dominant emerging nations, their fuel requirement has risen leading to governments investing in offshore drilling. China continues to collaborate with other countries thus expanding its global footprint.

In March 2024, China National Offshore Oil Company (CNOOC) announced the discovery of a large-scale deep-water resource in the Kaiping South oilfield. North America is expected to generate high revenue. The US and Canada have a massive presence in the offshore drilling sector worldwide. During the projection period, the US offshore drilling industry is likely to grow at a CAGR of more than 8.6%. In 2023, as per official projections, the US was projected to invest more than USD 500 billion in offshore investments. In April 2022, Canada announced the approval of USD 12 billion for the Bay du Nord offshore oil project.

Offshore Drilling Market: Competitive Analysis

The global offshore drilling market is led by players like:

• Seadrill Limited
• Transocean Ltd.
• EnscoRowan
• Noble Corporation plc
• Seadrill Partners LLC
• Diamond Offshore Drilling Inc.
• Vantage Drilling International
• Maersk Drilling
• KCA Deutag
• Shelf Drilling
• COSL - China Oilfield Services Limited
• Borr Drilling Limited
• Odfjell Drilling Ltd.
• Noble Corporation
• Pacific Drilling S.A.

The global offshore drilling market is segmented as follows:

By Water Depth

• Deepwater
• Shallow Water
• Ultra-Deepwater

By Rig Type

• Jackups
• Semi submersibles
• Drillships

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa