Drilling & Well Services expenditure: Onshore activity drives recovery
The global drilling and well services (‘DWS’) market is expected to see a sustained recovery over 2018-2022, led by a rebound in onshore US activity, according to Westwood Global Energy Group’s latest World Drilling & Well Services Market Forecast report.
Global Drilling and Well Services Expenditure Regional Split 2013-2022
- Total global expenditure over 2018-2022 is expected to amount to $1.4 trillion.
- Global onshore expenditure is expected to rise at a rate of 9% per year, while offshore will decline at -0.8% per year.
- North America accounted for 42% of global DWS expenditure over 2013-2017, rising to 52% over 2018-2022.
- Outside of North America, the Middle East will see the strongest compound annual growth rate for onshore DWS expenditure over the forecast at 5%.
- The outlook for growth in offshore DWS expenditure over the forecast remains constrained, following a decline in rig day rates and reduced project sanctioning as a result of the downturn.
- Rig & crew services is expected to account for 25% of global DWS expenditure over 2018-2022, while expenditure for stimulation services will see the strongest growth over the forecast period (12%).
Westwood Global Energy Group’s World Drilling & Well Services Market Forecast presents the latest view on prospects for one of the largest areas of total oilfield services expenditure. The new report, now covering to 2022, shows forecast expenditure totalling $1.4 trillion and growing at a 7% CAGR.
North American DWS expenditure is expected to rise at a CAGR of 12% through to 2022, representing 52% of the global market over the forecast period. The outlook for North America is buoyed by strong activity in the US onshore plays, with the combined effect of volume and pricing growth since 2016 expected to continue through the forecast – albeit at slower rates.
Outside of North America, international DWS expenditure over 2018-2022 is expected to total approximately $668bn, with a CAGR of 1% forecast over the same period. This is due largely to a stagnation in the offshore rig & crew market, which is expected to see minimal uplift in dayrates (without significant further scrapping of older assets.) Onshore, the divestment away from mature assets in China will stunt growth, while the majority of other regions outside of North America will see annual compound growth in the low single-digits through to 2022.
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