The Global increase in the drilling activities in order to cater the energy requirements of industrial and nonindustrial sectors has direct implications on the global contract drilling market. Rapid growth in population of different countries has further created an additional pressure on governments to supply the life line energy. Requirement of high capital expenditure and technical capabilities for the purpose of maintaining and purchasing the drilling equipments has augmented the market for contract drilling services. The service provider companies carry out all the drilling operations on the behalf of principal company as per the terms of contract. Movement towards the offshore drilling activities that require special expertise to carry out the drilling operations has further given a boost to such companies that are specialized in providing drilling services on a contract basis.
Segmentation of the contract drilling market can be done on the basis of service type, contract length, terrain types and geographies. Sometimes the principal companies require only a particular type of service that forms only a part of the drilling process. Depending upon the tenure of the project contract drilling market can be classified into short term and long term contract drilling market. Contract length for such product depends upon the size of the project or the number of wells that are to be drilled. Contract drilling services can be used to serve both the onshore and offshore drilling operations. Onshore contract drilling companies are taking advantage of the investments by principal companies to exploit unconventional shale gas, shale oil and coal bed methane reservoirs. Advancement in drilling technologies has led to a shift of contract drilling companies towards the offshore areas in search of oil and gas reservoirs. Companies are willing to invest in exploring the shallow as well as the untapped deep and ultra deep water areas.
Geographical segmentation of the contract drilling market can be done by identifying the major oil and gas producing countries. Major countries include the United States, Canada and Mexico in North America; Russia and Offshore areas of the United Kingdom and Norway in the North Sea. Middle East and African segment include major oil producers such as Saudi Arabia, Iran, Iraq, Kuwait, Angola Libya and Nigeria. Surge in the development of oil and gas industry in the African continent is expected to be beneficial for the contract drilling companies willing to invest in the African market. The Latin America segment includes countries such as Brazil, Venezuela, Argentina and Colombia. Increased drilling operations in the offshore areas of Brazil coupled with the surge in drilling activities to tap the shale gas reserves of Argentina has the potential to attract the contract drilling companies.
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Rising energy demands, increase in the onshore and offshore drilling activities, advancement in drilling technologies and the movement towards development of unconventional sources of energy are the major drivers for the contract drilling market. High capital requirement for purchase and maintenance of drilling equipments is the major restraint to the contract drilling market. Untapped hydrocarbon reserves of North African nations can act as the opportunities for the contract drilling market.