The upstream companies operating in Middle East sought jackups rigs with more specifications so as to drill more efficiently and optimize the costs of operations.
Rigs with enhance technical capability and better safety standards were demanded by the operators so as to drill at more depth and in challenging environments. Deterioration in the production levels from the existing fields and quest to explore new sources led to demand of high specialization rigs in the market. Drilling rig manufacturers like Lamprell received various orders for building up of new high specification jackups. Reduced levels of production from the existing fields, day rates of the jackups and other factors contributed to build up an environment suitable for the drilling contractors to operate at good profit margins. Increased demand of rig specification jackups with the drilling capability of more than 350 feet of water is required. Saudi Aramco and other major NOCs of Middle East planned several deepwater drilling projects to keep up with the production levels of future and to keep up with the crude oil supply in case of disruptions in the market.
Middle East possesses a vast potential of offshore discoveries to be made of large hydrocarbon reserves. The production in Middle East from large onshore and shallow water reserves started to decline which led to enhance the offshore deepwater and ultra deepwater production defined by drilling at least 1,000 ft below the sea level. The global capital expenditure in deep water E&P activity was USD 41.6 billion in 2014 and after Asia, Middle East is expected to see the fastest growth in deep water exploration and production spending. Drilling and completion followed by the subsea equipments shall form the major part of the Deep Water E&P segment. With increased E&P spending in the deep water and ultra deep water, OFS providers as well as the drilling equipment providers are anticipated to face challenges in terms of designing, deploying and operating related faculties and platforms in safe and profitable manner. An urgent need of ultra deep water rigs and facilities will enhance the OFS and drilling services market. Various seismic bids are already under review in several countries in Middle East with large offshore potential. Several contracts have been awarded for deep water and ultra deepwater exploration in Middle East. The deepwater and ultra deep water market requires continues supply of better technology and infrastructure which provides a great opportunity for the OFS providers and drilling equipments providers to enhance their productivity.
According to an industry veteran, “The drilling services industry will be dominated by the drilling rigs especially the jackups followed by other drilling tools and products. The crude oil slump has definitely impacted the demand of the oil and gas drilling services. However the condition is likely to improve in the years to come as the price of the commodity shall be stabilized.”
The Research Analyst, at Ken Research recommends that the players operating into the drilling and oilfield services have to enhance their E&P expenditure. Moreover, as per the scenario, most of the wells in the Middle East are drilled onshore. However, as the companies are projected to venture into the offshore markets, the offshore applications of these techniques are likely to witness an increase especially in the regions like UAE, Saudi Arabia and Oman where the onshore drilling market share is anticipated to deteriorate.
The report titled “Middle East Oilfields and Drilling Services Market Outlook to 2019” provides detailed overview on the oilfield and drilling services market and will help oilfield service companies and drilling service providers which help in the extraction of oil through offshore and onshore drilling operations. Moreover, the report will be helpful for the government to assess the potential of Middle East region, energy and oil companies and other stakeholders to align their market centric strategies according to ongoing and expected trends in the future.
Ankur Gupta, Head Marketing & Communications