Dublin, June 29, 2021 (GLOBE NEWSWIRE) -- The "Saudi Arabia Drilling Rigs Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" report has been added to ResearchAndMarkets.com's offering.
The Saudi Arabia Drilling Rigs Market is expected to grow at a CAGR of more than 1.5% over the period of 2020-2025.
Factors such as increasing investments in the sector are expected to drive the market. However, volatility in crude oil and natural gas prices, leading to a decrease in exploration and production activities, may restrain the growth of the market.
Natural gas production is expected to continue to be a vital part of meeting global energy demand, and the increase in its production is expected to drive the market.
New development in the smart rigs technology, like the advancements in the automated drilling rigs, is expected to make the oil and gas production more viable and may provide an opportunity for market players.
New rigs are being placed in the Persian gulf to extract crude oil and natural gas from the area, and this is expected to aid the growth of the offshore in the forecast period.
Key Market Trends
Increase in Natural Gas Production to Drive the Market
Saudi Arabia possesses around 18% of the world's proven petroleum reserves. The country is among the largest drilling rigs in the world and is expected to be driven due to the increasing production of natural gas.
In January 2020, ADES International Holding has secured a five-year contract renewal for the jackup ADMARINE 262 offshore Saudi Arabia. The new term, which comes into effect on the expiry of the current contract in April 2020, is expected to have a higher daily rate. Companies are investing in the continuation of oil and gas production in the country, which is expected to aid the growth of the market.
In 2019, Saudi Aramco awarded 34 contracts with a total value of USD 18 billion for the completion of the Marjan and Berri increment programs. The company plans to boost the production capacity of the fields to 550,000 barrels per day of crude oil and 2.5 billion standard cubic feet a day (BSCFD) of natural gas. These investments are expected to support the continued focus on employing advanced technologies in the sector and are expected to aid the drilling rigs market.
Natural gas production in the country has increased by 1.4%, to 11.00 billion cubic feet per day, in 2019 from 10.85 billion cubic feet per day in 2018. The increase in natural gas production may act as a driver for the Saudi Arabia drilling rigs market.
Hence, Saudi Arabia is expected to dominate the market in the forecast period due to an increase in production, advancements in technologies, and high efficiency in aiding oil and gas production.
Offshore Segment to Witness Growth
In the offshore segment, the drilling rigs are expensive and high-risk, the offshore platforms in the Persian Gulf have proven their usage from multilateral wells, horizontal wells with multiple zones, wells in heterogeneous reservoirs, and mature reservoirs.
New technologies in the sector are increasing the crude oil and natural gas produced. This involves the use of a wired drill pipe developed for automation drilling, which provides real-time downhole data that can be used to make adjustments during drilling. This has helped decrease the cost of drilling for the company. The technology has been deployed in Norway and may be deployed in different areas of the world, including Saudi Arabia.
In January 2020, ARO Drilling, a 50-50 joint venture (JV) between offshore drilling contractor Valaris and state-owned oil firm Saudi Aramco, has ordered two newbuild jackup rigs. According to Valaris, each new build are expected to cost approximately USD 175 million. They are expected to be constructed to the specifications laid out by Saudi Aramco. More joint ventures and increasing investment in the sector may aid the growth of the market.
Offshore rigs increase by 2.3% to an average of 18.583, in 2019 from 18.166 in 2018. An increase in the number of offshore is expected to take place in the forecast period. Thereby aiding the growth of the market
Crude oil production in the country has decreased by 3.5%, to 556.6 million tonnes, in 2019 from 576.8 million tonnes in 2018. The decrease in oil production may act as a restraint on the Saudi Arabia drilling rigs market.
Hence, the offshore segment is expected to witness growth in the forecast period due to an increase in investments, increasing units of rigs, and advancement in technology.
The Saudi Arabia drilling rigs market is partially fragmented. Some of the key players in this market are Valaris plc, Arabian Drilling Company, Saipem S.p.A., ADES International Holding PLC, and Shelf Drilling Holdings, Ltd.
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