February 21, 2024
Offshore Drilling Rigs Market

Offshore Drilling Rigs Demand Propelled by Increased Exploration Activities in Deepwater Regions

The offshore drilling industry involves complex rig installations operating in deep waters to extract oil and natural gas reserves. Rigs are generally self-propelled vessels equipped with drilling machinery, control systems and accommodations to enable round-the-clock offshore exploration activities. Based on depth operating capacities, rigs are classified as jackups, semi-submersibles and drillships. Jackups can drill in waters up to 400 feet while semi-submersibles and advanced drillships are specially designed for deepwater drilling in over 5,000 feet of ocean. Increased investments by national oil companies and international super majors in exploration and production projects located far offshore regions are driving significant rig construction.

The global Offshore Drilling Rigs Market is estimated to be valued at US$ 86.87 Bn in 2024 and is expected to exhibit a CAGR of 8.5% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the key trends prevailing in the offshore drilling rigs market is the development of advanced deepwater rigs with enhanced technological capabilities. Rig operators are investing heavily in R&D to develop sixth and seventh generation ultra-deepwater rigs which can drill in water depths exceeding 12,000 feet. These advanced rigs feature unique designs optimized for increased mobility, precise drilling in extreme operating conditions and integration of automated systems. They employ hull designs lowering rig center of gravity for enhanced stability at depth. Advanced dynamic positioning systems precisely maintain rig position even in severe sea states and storms. Incorporation of condition monitoring, data analytics and remote operations enables optimized drilling performance.

Porter’s Analysis

Threat of new entrants: The offshore drilling rigs market has high capital requirements and economies of scale which create entry barriers. Drilling rigs also require specialized equipment and assets that are difficult to source which further limits the threat of new entrants.

Bargaining power of buyers: Buyers in the form of oil & gas companies have significant bargaining power due to the fragmented nature of the offshore drilling rigs market with multiple global suppliers. Buyers can exert pressure on pricing through competitive bidding.

Bargaining power of suppliers: A few large conglomerates dominate the supply of offshore drilling rig equipment and services. This concentrated supplier base is able to exploit their bargaining power to maintain high prices. Substitute materials and components have limited availability.

Threat of new substitutes: There are limited substitute technologies that can replace offshore drilling rigs for deepwater oil & gas exploration. However, renewable energy is emerging as a substitute for fossil fuels in the long run.

Competitive rivalry: The offshore drilling rigs market has high competition among major players. Players compete based on rig fleet modernization, technical expertise, price, and location of rig operations.

Key Takeaways

The Global Offshore Drilling Rigs Market Demand is expected to witness high growth over the forecast period.

Regional analysis: Asia Pacific region accounted for the largest share of global offshore rig fleet deployment in 2024. The promising outlook of oil and gas exploration projects in Southeast Asia and China is expected to drive demand for offshore drilling rigs in the region.

Key players: Key players operating in the offshore drilling rigs market are Sims Metal Management Ltd., Schnitzer Steel Industries, Inc., Nucor Corporation, European Metal Recycling Ltd., Kuusakoski Group, Novelis Inc., OmniSource Corporation, Ferrous Processing & Trading Co. (FTP), Metal Management Inc., and ELG Haniel Group. The market is characterized by consolidation as large players have undertaken mergers and acquisitions to expand their rig fleet and global operations.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it