New York, July 24, 2023 (GLOBE NEWSWIRE) -- The global downhole tools market size is projected to expand at ~5% CAGR between 2023 and 2035. The market is expected to garner a revenue of USD 7 billion by the end of 2035, up from a revenue of ~USD 4 billion in the year 2022.The rising drilling activities at the oil and gas well have increased the demand for downhole tools, including drill bits, screens, and casing. The downhole tools are interested deep into the ground levels for placing the casing pipes for smooth flow of water. Volumes discovered in high-impact wells have nearly increased by 4 times to over 2 billion barrels of oil equivalent (boe).
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Downhole Tools Market: Key Takeaways
- Market in Middle East & Africa to propel the highest growth
- The Drilling segment to garner the highest growth
- Market in Asia Pacific market to grow at a significant rate
Rising Consumption of Oil to Boost the Growth of the Downhole Tools Market
Oil exploration is often driven by the demand for oil and the need to meet the growing energy requirements of various sectors such as transportation, industry, and residential use. When the oil demand increases, oil exploration tends to increase as well, driven by both economic and technological factors. In 2023, the demand for oil across the world anticipate to increase by 1.9 million barrels per day. On the other hand, the need for biofuels and crude oil will climb by around 102 million barrels per day in 2023. Downhole tools play a substantial part in the extraction of petroleum and natural gas, contributing address the ever-growing demand for energy. This equipment assists in enhancing well performance, regulating the efficiency of production, and maintaining safe extraction at various phases of production.
Downhole Tools Market: Regional Overview
The market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
The Increased Use of Drilling Equipment to Drive Market Growth in the Middle East and Africa Region
The Middle East and Africa downhole tools market is predicted to hold 31 percent of the share by the end of 2035. The countries in this region are well known for their abundant reserves of oil and gas. As these regions continue to be major players in the global energy sector, there is a constant need for drilling machines to explore, extract, and produce oil and gas resources. Apart from oil and gas, the region is also rich in mineral resources, including gold, copper, iron ore, and diamonds. Mining companies require downhole equipment in the mining sector as well. Consumption for long rigs is estimated to climb by 25% between 2023 and 2027 as the oil companies in Saudi Arabia and UAE is to increase their production capacity targets. Furthermore, the oil and gas industry in the region that is continuously evolving, and advancements in downhole tool technology have contributed to increased demand. Besides this, the expanding oil and gas industry in the Middle East and Africa region will raise demand for oil and gas, resulting in increased trade of oil and gas, which further increases the drilling of both onshore and offshore wells. The Middle Eastern region supplied around 14 million barrels of oil per day in 2021, this is a four percent spike over the previous year.
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Rising Well Intervention is to Elevate Market Growth in Asia-Pacific
The downhole tools market in the Asia Pacific region is set to hold a notable share of 27 percent by the end of 2035. With the growing demand for oil and gas, the investment in well intervention drilling and services is boosting the market growth in the region. China's national oil corporations (NOCs) are estimated to invest over USD 120 billion in drilling and well services between 2021 and the year 2025, according to the estimates. The Asia Pacific region has witnessed rapid industrialization and economic growth, leading to a surge in energy consumption. As countries in the region continue to develop, the demand for oil and gas as primary energy sources remains high. Moreover, in the second half of the year, Asia will drive oil demand growth of roughly 2 million barrels per day (bpd).
Downhole Tools Segmentation by Tool Type
- Handling
- Drilling
- Impurity Control
- Downhole Control
- Flow & Pressure Control
Out of the different tool types, the drilling segment in downhole tools market is expected to gain the highest market revenue of 35 percent over the forecasted period. Drilling equipment demand is increasing due to a variety of causes, restricted accessibility of renewable energy resources, increasing need for energy, a greater dependency on oil and gas in the transportation sector, and improving living standards. Owing to all the factors, the need for drilling tools has increased. For instance, demand for contemporary jack fleets is expected to approach 95% in the coming quarters, according to leading jack-up fleet operators.
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Downhole Tools Segmentation by Application
- Drilling
- Completion
- Intervention
- Formation & Evaluation
Out of all the application, the drilling segment is expected to be responsible for the largest market share of 40 percent in the upcoming years. Downhole tools have various applications, but their major use is in drilling. It aids in the discovery of probable hydrocarbon sources. In drilling, downhole seismic equipment such as geophones and accelerometers are employed to survey geological formations beneath the ground. The growth of the segment is primarily attributed to the growing extraction of liquid and gas. Discovered gas accounts for around 550 million boe in 2022, while newly discovered liquids account for approximately 1 billion boe or approximately 70% of global quantities.
Downhole Tools Segmentation by Location
- Offshore
- Onshore
A few of the well-known market leaders in the downhole tools market that are profiled by Research Nester are Aker Solutions ASA, AKITA Drilling Ltd., Archer Ltd., Baker Hughes Co., Dril Quip Inc., Halliburton Co., Hunting Plc, Innovex, NexTier Oilfield Services Inc., and Tryton Tool Services Ltd.
Recent Developments in the Market
- February 2022, Aker Solutions ASA, the subsidiary, has signed an agreement with Dril-Quip, Inc.'s subsidiary. This partnership will provide the subsea injection systems that are used for utilization, storage, and capturing the carbon. The partnership will substantially leverage Aker Solution's position as an integrated supplier of CCUS systems, along with the control systems and electrical components.
- March 2022, Baker Hughes has announced the acquirement of Altus Intervention, a global leader in well intervention. This purchase will strengthen Baker Hughes' current spectrum of oilfield technology and integrated products by increasing the company's life-of-well capabilities, which are important as operators seek to increase productivity from mature wells.
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