Rising E & P activities in deep-sea beds associated with drilling and completion efficiencies result in the maximization of production rates by industry participants. This, in turn, has worked in favor of the market.
Ongoing demand for technologically advanced tools that function optimally in high-pressure and high temperature (HPHT) conditions, for enhancing the penetration (ROP) is also anticipated to stoke the growth of the market.
The companies are continuous that specializes in developing new technologies to sustain the competition and also to reinforce drilling activities with higher ROP and minimal cost involvement.
Significant oilfield developments in Texas, Gulf of Mexico, and North Dakota, coupled with supportive governmental regulations for unconventional hydrocarbon reserves, are projected to boost the market growth.
Ongoing technological advancements for E & P activities are poised to be one of the primary growth stimulants for the market.
High-capital investments for new product development, coupled with risk factors related to their ability to withstand extreme operational environments, are likely to inhibit the growth of the market.
Nevertheless, the leading market participants are focusing on curbing costs and optimizing operational efficiencies with funding from numerous publicly-traded companies.
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Based on the product, the drilling tools segment is expected to dominate the market through 2026. The growth of the segment can be attributed to heightened rates of drilling activities in various economies such as Argentina and Colombia.
This is further supported by recommencing onshore drilling in countries such as Libya & the Republic of Congo, new drilling project startups in Qatar and China, and increased drill bit sales in Algeria.
The global marketplace for handling tools and flow & pressure control tools is additionally estimated to witness substantial growth over the forecast period due to their increasing applications within the production phase.
These tools are useful in addressing several challenges, such as extreme depth, high temperatures, and pressure differentials associated with producing formations.
Based on application, the downhole tools manufacturers have been segmented into good intervention, drilling, production & well completion, and formation and evaluation. The production & well completion segment is anticipated to carry the most important share within the market, followed by good drilling.
By 2026, the demand for equipment required in well drilling applications is estimated to be over USD 1.43 billion.
The growth of the formation and evaluation segment in North America is driven by the advent of advanced evaluation technologies such as radiology and logging while drilling. The market for formation and evaluation in the Asia Pacific is poised to expand at a CAGR of 4.4% over the forecast period.
Revenue generated by North America increased marginally by 1.3% in 2017 as compared to 2016, as a result of enhanced land activity and partially offset by lower foreign revenue.
Also, recommence of several shale plays in the U.S. during the last few years, assisted by key participants, provided a great impetus to the growth of the market in the region.
European countries such as the U.K. and Norway are likely to witness high development, especially in offshore basins, owing to increased deep-sea drilling activities in the North Sea.
Furthermore, recent developments in offshore activities such as rising oil production in various economies such as Iran and Qatar are expected to spur the offshore E & P in the Middle East over the coming years.
To implement various new downhole tools technologies, operators have been focusing on countries in the Middle East and North Africa. Global players are also exploring new horizons for gaining higher profits from the rising supply of crude oil in the region.
For instance, in the Middle East, increased demand for advanced downhole technologies has allowed Halliburton to build a leading position in project management, grow its market share, enhance ROP, and lower the value of drilling wells.
Downhole Tools Market Share Insights
The market is marked by the presence of key multinational players actively engaged in mergers & acquisitions, technological innovations, research & development, and partnerships to improve their dominance over competitors.
Furthermore, companies such as Halliburton, Schlumberger, and Weatherford International have invested in expanding their production capabilities to enhance their portfolios and regional presence.