Market Overview:

The global Directional Drilling Services Market was worth USD 9.9 billion in 2022. By 2030, it is projected to be worth USD 10.23 billion, meaning that it will have grown at a CAGR of 3.3% from 2022 to 2030.

Growing demand for various tools and equipment used in the global oil and gas industry and the increasing discovery of new bulk potential reservoirs are expected to propel market demand. To meet the exponentially growing demand, various companies are concentrating their investments in exploration and production activities.

Directional drilling services include how to efficiently drill a well and maximize yield through lateral production through the well. The technology offers numerous benefits, including flexibility, minimal site restoration, low soil contamination, a low risk of geologic anomalies, and faster installation at a lower cost, which bodes well for the market. Reduction in maintenance and operational rig downtime through directional drilling will consequently increase demand and propel the directional drilling services market's growth. The increase in E&P activity at multiple locations, combined with the adaptability of advanced technology to drill multiple wells at a single location to deliver maximum output with minimal downtime, propels the industry and increases the need for directional drilling services.

Significant Market Dynamics:

Drivers

• Discoveries in the Oil & Gas Industry are Driving Market Expansion

 The discovery of reserves and oilfields drives the industry of directional drilling services. The major discoveries include Alpine High in West Texas, Alaska in the U.S., Golan Heights in Israel, gas discoveries in the Kara Sea off the north-western part of West Siberia's Yamal Peninsula - Dinkov and Nyarmeyskoye), oil discoveries in the Stabroek block Tilapia, Yellowtail (oil) and Haimara (gas-condensate), an offshore gas discovery with the Lang Lebah-1RDR2 exploration well, and among other discoveries. In the coming years, it is anticipated that oil prices will increase, which will encourage oil field operators, gas production, and independent exploration companies to invest in oil and gas discoveries and exploration activities.

• Increasing energy demand is anticipated to positively impact market size.

According to European Energy Industry Investments 2017, power utilities planned to invest USD 295 billion in transmission and distribution infrastructure between 2021 and 2030 under new policy scenarios, resulting in greater grid efficiency and dependability, which fuels energy demand. Moreover, tremendous construction efforts to construct commercial spaces, business parks, and housing communities are anticipated to increase electricity demand.

Restraints

• Constant fluctuations in oil prices are impeding market expansion over the forecast period.

• The expansion of alternative energy generation technologies such as solar, wind, and hydro will reduce reliance on oil and gas, thereby inhibiting market expansion.

• The market expansion is anticipated to be impeded by the volatility of oil prices and the expansion of alternative energy generation technologies.

The oil price is significantly influenced by the fluctuating demand and supply of oil. The higher price of oil halts future projects and investments, thereby halting drilling projects. Significant growth in alternative energy generation technologies, such as solar, wind, and hydro, would reduce reliance on oil and gas, which is likely to have an effect on oilfield services. Consequently, the volatility of oil prices and the expansion of alternative energy generation technologies will restrain the market's growth over the forecast period.

Key trends

• The increasing investment in the offshore sector to locate additional reservoirs and increase oil and gas production. This makes it the segment of the market with the highest growth rate. Countries such as China, the United States, and Russia have already invested because offshore drilling has become less expensive over the past few years.
• As a result of globalization and urbanization, the current demand for coal, gases, and transportation fuel has increased, necessitating the expansion of the oil & gas industry, and the largest market participants, including China, Russia, and the United States, have increased their investment in the search for oil fields.
• The global oil and gas industry has grown as a result of increased energy consumption. They are utilized primarily for transportation, power generation, and industrial purposes, among many others.
• The United States dominates the market because of its superior technology, which enables drillers to reach greater depths and improves the visibility of drilling instruments submerged.
• China and the United States are the largest consumers of oil and gas; they are increasing their investments in renewable energy power generation to reduce their carbon emissions and reliance on fossil fuels.  They are establishing a larger substation for hydro, solar, and wind energy, which will have a greater impact on the oil, gas, and drilling markets.

COVID-19 Impact 

• The COVID-19 outbreak has had a significant effect on the hydrocarbon and gas market. As the number of cases increases daily, countries have been placed under complete quarantine. This resulted in low automobile sales and a halt in industries such as transportation, airlines, and energy production. 

• According to government regulations, companies must follow the lockdown protocol and close down their production units. Additionally, because of the labour shortage and with their protection in mind. Several on-going initiatives must be temporarily suspended immediately. The global price and supply of oil and natural gas have been affected.

Key Market updates

• In November 2021, Nabors Industries Ltd and Chesapeake Energy Corporation entered into a contract designating Nabors as the preferred drilling contractor for oil and gas operations in the United States. This agreement will likely allow the company to expand its business portfolio nationwide.
• In 2019, Schlumberger Limited showed an at-bit steerable system for drilling horizontal wells in a single pass, which features a novel cutting structure and steering mechanism.
• Halliburton Company signed a contract with Kuwait Oil Company in 2019 to integrate offshore drilling services for six high-pressure, high-temperature exploration wells in the Arab Gulf.
• In November 2016, GE oil & gas will open a new facility in Egypt, in collaboration with the General Authority for Investment and Free Zones (GAFI) (Egypt). These facilities will disassemble, assemble, repairs, and provide maintenance & testing for GE Oil & Gas products. This facility will be operational by mid-2017. 
• In October 2016, National Oilwell Varco, began developing its closed loop automation system. This system uses intelligent controls to develop its technology. This system is a combination of drilling systems, software application of eVolve™ Optimization Service, NOV Operating System (NOVOSTM) and control systems. This system will enhance the operator's drilling operations.  
• In September 2016, Halliburton Company released new drilling motors GeForce® Endure™ and StrataForce™ Endure™ motors, these motors reduce non-productive time associated with chunking, and enhances the motors reliability in harsh environments.

Market segmentation

By Type 

The market is segmented by application type into onshore applications and offshore applications. Due to the large number of mature onshore wells worldwide, onshore applications are anticipated to dominate the market over the forecast period.

By Drilling Technique

The market for directional drilling services is segmented by type of drilling technique into conventional methods and rotary steerable systems. During the forecast period, the rotary steerable system is anticipated to experience the most rapid growth due to its numerous advantages, such as shorter drilling times and smoother wellbores.

Based on Service Type

The market is segmented by service type into LWD, MWD, surveys, RSS, and motors. The Measurement-While-Drilling (MWD) and Survey segment is anticipated to grow at the maximum rate over the forecast period, owing to the ability to continuously monitor the wellbore and conduct a real-time directional survey of downhole conditions.

Regional Insights 

The Directional Drilling Service Market is divided into North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America, based on geography. North America is anticipated to dominate the market for directional drilling services. The growth of the global market can be attributed to factors such as shale gas drilling ventures in the United States and Canada.


Due to the increase in gas E&P operations in the Gulf of Mexico, the United States is the leading competitor in the zone. Alongside the North American market is the Asia Pacific market, which is operated by E&P enterprises in India and China. China, a significant consumer of oil and gas, planned to increase its crude oil consumption despite its apparent return to coal as a major power source due to stringent government regulations. The Middle East and Africa are also significant players in fossil fuel exploration and production.

This is anticipated to increase in the coming  year due to a rise in the production of onshore and offshore exploration projects. On the other hand, the unpredictability of the upstream oil market and the decline in crude oil prices increase the focus on renewable energy, which can restrain the global market.

Scope of the Report

Key vendors

Baker Hughes (NASDAQ: BKR) is a global provider of energy technology solutions to energy and industrial consumers. Their innovative technologies and services are advancing energy, making it safer, greener, and more cost-effective for people and the environment. 

 More than a century ago, their inventions revolutionized the energy industry. The company redefines what is possible by utilizing the power of technology, data, and science. The equipment and service capabilities span both the energy and industrial value chains.

2. Halliburton Company (US)

Halliburton, which was founded in 1919, is one of the world's leading suppliers of products and services to the energy industry. With more than 45,000 employees, representing 130 nationalities in more than 80 countries, the company helps its customers maximize value throughout the lifecycle of the reservoir— from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the asset.

3. National Oil well Varco Inc. (US),

National Oilwell Varco (NYSE: NOV) is a noticeable supplier of technology, equipment, and services to the global oil and gas industry, supporting customers' full-field drilling, completion, and production requirements. Since 1862, NOV has been at the forefront of developments that enhance the cost-effectiveness, efficiency, safety, and environmental impact of oil and gas operations.

4. Nabors Industries, Ltd. (Bermuda)

Nabors Industries is the foremost provider of innovative technology to the energy sector. Nabors has established a global network of people, technology, and equipment to deploy solutions for safe, efficient, and responsible energy production in approximately 20 countries. By leveraging its core competencies, especially in drilling, engineering, automation, data science, and manufacturing, Nabors seeks to innovate the future of energy and facilitate the global transition to a lower carbon footprint. Using its sophisticated drilling automation capabilities, Nabors' highly skilled labor force continues to establish new benchmarks for operational excellence and transform our industry.

5. Cathedral Energy Services Ltd. (Canada)

Cathedral Energy Services is a reliable partner for North American energy firms in need of high-performance directional drilling services. They collaborate with customers to modify our equipment and expertise to their geographical and technical specifications. Their customers are able to achieve higher efficiencies and lower project costs as a result of our expertise, technologies, and responsive personnel. Cathedral Energy Services has been dedicated to providing superior service and inventive drilling technologies since 1998. 

Market Key Players:

• Baker Hughes Incorporated (US)
• Halliburton Company (US)
• Schlumberger Limited (US)
•  Weatherford International 
• PLC (Switzerland)
•  National Oil well Varco Inc. (US),
•  Nabors Industries, Ltd. (Bermuda)
•  Cathedral Energy Services Ltd. (Canada)
•  Jindal Drilling & Industries Limited (India)
•  Gyrodata Incorporated (US)
•  Scientific Drilling International (US),
• Leam Drilling Systems
• LLC (US)
• Phoenix Technology Services (Calgary, Canada)
• Scientific Drilling (Texas, US)

Major market segments covered

By Type:

• Conventional
• Rotary Steerable System

By Drilling Technique:

• Onshore
• Offshore

By Service:

• Rotary Steerable System (RSS)
• Logging-While-Drilling(LWD)
• Measurement-While-Drilling (MWD) & Survey
• Motors (MUD Motors)

By region

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• France
• Italy
• Spain
• UK
• Nordic Countries
• Denmark
• Finland
• Iceland
• Sweden
• Norway
• Benelux Union
• Belgium
• The Netherlands
• Luxembourg
• Rest of Europe
• Asia-Pacific
• Japan
• China
• India
• Australia
• South Korea
• Southeast Asia
• Indonesia
• Thailand
• Malaysia
• Singapore
• Rest of Southeast Asia
• Rest of Asia-Pacific
• The Middle East & Africa
• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest of the Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America

Conclusion

Directional drilling market research investigates manufacturing processes, cost structures, and policy and development objectives. The research is an excellent resource for businesses and anyone with an interest in the market because it provides essential data on the industry's current state.