The global drilling fluids market was valued at US$ 6660.5 Mn in 2017 and is anticipated to expand at a CAGR of around 5.9% from 2018 to 2026 according to a new report titled ‘Drilling Fluids Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018–2026’ by Transparency Market Research (TMR) . Rise in crude oil prices has encouraged oilfield operators to drill wells in offshore and onshore areas. This augments the need for drilling fluids.
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Drilling Fluids are Essential for Drilling Operations
Drilling fluids play a crucial role in oil and gas exploration activities. These fluids are a mixture of water, oil, clay, and several chemicals. Drilling fluids are also known as drilling muds. These fluids perform numerous functions such as cooling the drill bit and lubricate its teeth, carrying the drill cutting to the surface, and reducing the drill pipe stuck problems. The mud maintains hydrostatic pressure to prevent the formation of fluids from entering the wellbore. Newly developed state-of-the-art drilling fluids treatments offer superior drilling performance. Rise in the Marcellus and Bakken shale oil & gas formation in the U.S. and other countries such as Argentina and China has propelled the demand for drilling fluids.
Shift from Oil Based Muds to Water-based Muds
Several governments have imposed environmental regulations on the usage of oil based muds, as these are harmful while drilling. Water-based muds contains fresh water, seawater, brine, saturated brine, or a formate brine. This type of mud contains commercial bentonite or attapulgite. Water-based muds are widely used and less expensive than oil-based muds and synthetic-based muds. Water-based mud maintains hydrostatic pressure to prevent fluids formation from entering into the wellbore. Improvements in drilling technology has propelled the demand for synthetic-based muds.
Offshore Drilling Activities to Increase Demand for Drilling Fluids
Offshore drilling is a mechanical process where a wellbore is drilled below the seabed. It is typically carried for the exploration and extraction of petroleum, which lies in rock formations beneath the seabed. Based on application, the offshore segment is anticipated account for a large share of the market due to the rise in crude oil prices globally. This is estimated to boost the drilling fluids market in the near future. Rise in drilling operations in the offshore areas such as Gulf of Mexico, North Sea, and South China Sea propels the demand for drilling fluids.
Regulatory Framework & Environmental Regulations
Several governments have implemented environmental norms and regulatory framework to curb environmental pollution caused due to the harmful effects of oil based muds. Regulation such as Environmental Guidelines and Standards the Petroleum Industry in Nigeria (EGASPIN) has been framed to regulate drilling fluids. The framework limits the use of water-based muds to be discharged into fresh water, coastal water, and offshore areas of operation. After the Deepwater Horizon incident that occurred in the Gulf of Mexico in April 2010, the European Commission (EC) renewed the regulatory framework in Europe for the usage of drilling fluids.
The U.S. to Lead Drilling Fluids Market in North America
In terms of value, North America dominated the global drilling fluids market in 2017. Rise in investments in exploration and production of offshore oil & gas is propelling the adoption of drilling fluids around the world. Rise in upstream activities by the oil & gas industry is expected to increase the production volumes, thereby propelling the global drilling fluids market. Prices of natural gas have been increasing at a steady pace across the globe since the beginning of 2018, and offshore and onshore exploration and production activities have increased at a rapid pace. Demand for the drilling fluids is anticipated to increase in areas such as Marcellus and Bakken field in the U.S.
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Highly Competitive Market
The global drilling fluids market is highly competitive. Leading players dominate the market. Key players operating in the market include Schlumberger, Baker Hughes- A GE Company, Newpark Resources Ltd, Akzo Nobel, Clariant, and Solvay.