Offshore drilling rigs are used for drilling and exploration activities in the offshore arena. The high demand for crude oil, along with the maturing of onshore oil and gas wells is driving the market for offshore drilling rigs. The increase in the number of investments from operators, especially for deep and ultra-deep water activities, fuels the growth of the offshore drilling rigs market. Semi-submersibles and jackups dominate the global offshore drilling rigs market, owing to increasing shallow and deepwater explorations. The major regions of the offshore drilling rigs market are Latin America, the Gulf of Mexico, and Western Africa; most offshore explorations and drilling activities take place in these regions.
Growing demand for deepwater activities in the Asia-Pacific region and further drilling into mid ocean is driving the demand for mid and deep water floaters. Additionally, increasing investments with high E&P Capex in these regions are also propelling the growth of the deepwater market. Drillships currently have the largest market size because of increasing ultra-deep water activities in growing offshore regions across the world.
Growing Offshore CAPEX: A driver of the offshore drilling rigs market
The global offshore drilling rigs market has witnessed decent growth, precipitated by the increasing global demand for energy and rising number of investments from operators in deepwater drilling activities. The largest markets for offshore drilling rigs are Latin America, Asia-Pacific, and Africa.
Offshore Drilling Rigs: Market Share, by Geography, 2014
Source: MarketsandMarkets Analysis
The Latin American region has abundant high offshore potential reserves of oil and gas. Furthermore, factors such as increasing investments in E&P CAPEX in the region are leading to growing offshore exploration and production activities, thereby increasing the demand for drilling equipment and offshore rigs.
The progress of the offshore rigs market largely depends on growing exploration activities across the globe. The recent discoveries of oil and gas reserves in remote areas, along with increasing technological advancements in terms of equipment have made drilling operations more feasible and cost-effective.
COSL (China), Nabors (Bermuda), Ensco plc. (U.K.), Diamond Offshore Drilling (U.S.), KCA Deutag (U.K.), and Maersk Drilling (Denmark), are the major players that constitute a significant share of the global offshore drilling rigs market. These players are concentrating on growing markets and are investing heavily to meet the demand from these markets and to reduce contract backlogs. KCA Deutag and Noble Corporation, two of the oldest players, have been gaining traction in this market owing to their vast experience and expanding product portfolios, and through providing drilling services to emerging markets.
Contracts and Agreements: Key strategy
Most of these companies rely mainly on availing contracts for drilling from operators. This is done in order to gain maximum revenue and avail of niche opportunities in the market. To meet the demand for offshore drilling activities and to enhance oil productivity, drilling contractors have opted for contract extensions and agreements as their key strategy.
The major offshore drilling rig types include jackups, semi-submersibles, and drillships. Semi-submersibles are the largest in terms of market value and jackups are the most widely employed rigs for offshore drilling.