Wired Drill Pipe Market Trends

Key Emerging Trends in the Wired Drill Pipe Market

Deep water and ultra-deep-water exploration and drilling operations are on the rise in the global oil industry. This surge in activity comes after a significant downturn in 2014 when oil prices faced a major shock. Now, with a growing demand for oil from emerging economies and increased industrialization, the global oil industry is evolving rapidly. The OPEC's decision to extend production cuts has created an opportunity for both national oil companies and independent players in the upstream sector to increase their profit margins. This, in turn, has led to improvements in the service quality provided by oilfield service providers.

According to a study conducted by rigzone in January 2018, the total count of offshore rigs reached around 1,300. Different regions around the world contributed to this offshore rig count, with notable figures in Canada and the United States. In Canada, the total number of wells drilled in 2017 was 7,550, and it was projected to reach 7,900 in 2018. In the United States, the estimated number of wells drilled in 2017 was 24,186, and it was expected to increase to 27,095 in 2018. This rise in offshore rig count has had a positive impact on the Managed Pressure Drilling (MPD) market.

Upstream operators are increasingly focusing on offshore locations, especially those at greater depths, to optimize oil reserves. The vast areas available in offshore locations make them suitable for maximizing reserve optimization. As hydrocarbon exploration and production operators aim to boost production rates from existing wells and drill new ones, MPD activities have seen rapid development in the offshore region. For instance, in 2017, the offshore classification organization ABS granted Seadrill's West Capricorn drilling unit the MPD notation, supporting new drilling technologies and standards.

The continuous increase in offshore rig counts, reaching 376 in January 2018, is a testament to the growing exploration and drilling activities. Regions like the Gulf of Mexico and North Sea have become hotspots for new discoveries in oil and gas resources. Major operators are actively competing to secure assets in these areas, leading to increased investments in offshore exploration. Deepwater and ultra-deepwater well drilling, essential for maximizing production flow and penetration rates, have proven advantageous for MPD service providers.

Notably, in March 2018, Shell and Chevron announced a new discovery in the Gulf of Mexico, and ongoing exploration activities in Ballymore, North Platte, and Anchor regions are further contributing to the exploration momentum. The current recovery of oil prices and the extended production cut by OPEC, resulting in limited production bandwidth, have driven increased drilling operations in oil and gas wells, thereby boosting the MPD market. The growing exploration and drilling activities in deep and ultra-deep waters are creating opportunities for the MPD market to play a crucial role in ensuring optimal production and operational efficiency.