In recent times, offshore rigs have seen reductions in spite of higher oil prices, with the high demand for crude oil products from around the world. This can be attributed to cost efficiency trends and the growing interest from OPEC and shale deposits. These factors are anticipated to limit expansion of offshore oil drilling, and consequently limit the scope for the offshore drilling equipment market.
As per a recent study conducted by Future Market Insights on the global offshore drilling equipment market, that despite rising prices, oil production operators are waiting on improvements in pricing stability, with the concern of long lead times, before committing resources towards offshore drilling activity, which are expected to constrain the production and sale of relevant equipment in the near future.
As per the report, rising competition from North American shale oil projects have given operators lucrative returns, owing to favorable economic situation and easier availability of capital. Which have even offset the impact of supply cuts by OPEC to an extent. These factors have had a major impact on offshore rig activity, with a lot of the existing infrastructure idling, consequently reducing the scope of new offshore drilling equipment.
“The offshore drilling industry has witnessed strong activity towards consolidation in the recent years, resulting in reduction of fleets and drilling equipment. On the other hand, reduced day rates for offshore rigs, lower operational costs, and improvements in standardization has cut the costs of projects by nearly 40 per cent. This is anticipated to sustain offshore drilling activity. However, it will not be enough to initiate new projects in the next few years, stalling the drilling equipment market.” Senior Analyst, FMI.
However, the offshore drilling equipment market will be positively influenced by the rising number of rig retirements estimated to take place in the near future owing to the arrival of new rigs to meet modern drilling operation and environment specifications, creating lucrative opportunities for equipment manufacturers for the long term.
Electric Mud Pumps to Witness Higher Offshore Application Owing to Stringency in Emission Control Norms
Offshore drilling operators are increasingly moving away from using conventional fuel run mud pumps for their activities. This is largely attributed to the reducing popularity of petroleum oil as a liquefaction agent, and the toxic emissions from fuel run mud pumps, that raises concerns from increasingly eco-savvy businesses.
Regulatory bodies from around the world are pushing for the use of sustainable equipment and products, which are encouraging rig operators to opt for electricity run mud pumps, as they are eco-friendly, and offer additional benefits of smoother operations and noise reduction, among others, which create product development opportunities for manufacturers in the mud pump market.
A large part of the demand for these pumps is anticipated to come from the countries of the Middle East as operators in the region continue to invest in offshore drilling operations with the aim of boosting amount of CNG being exported from there.
The report by FMI provides detailed insights on the businesses operating in the mud pumps market along with comprehensive assessment of prominent opportunities in the market.
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