More than 40% of drilling problems occur during offshore operations, significantly increasing non-productive drilling time and therefore cost. As oil operators move towards more complex drilling environments, they find themselves exposed to high risk. Against this backdrop and the continued need to maintain energy security, oil operators are increasingly adopting advanced technologies such as managed pressure drilling (MPD) that offer safety benefits.
Recent analysis from Frost & Sullivan finds that the MPD service market earned revenues of US$11.4 billion in 2014 and estimates this to reach $18.5 billion in 2020 at a compound annual growth rate of 8.4%.
“Geographically, North America will be the highest revenue contributor due to huge capital expenditure (CAPEX) advancement in MPD technology. West Africa will be another important market for MPD as drilling costs are high and large investments in offshore drilling have been made in the region,” said Mahesh Radhakrishnan, Frost & Sullivan energy and environment industry analyst. “Along with these markets, Asia-Pacific and Europe are expected to witness high end-user interest in MPD technology owing to rising energy demand and redevelopment of mature oilfield wells.”
Although MPD reduces non-productive drilling time significantly, the high CAPEX generally deters operators from moving away from conventional drilling. The lack of industry experts and the strong expertise needed to execute MPD projects have also discouraged adoption.
“The breadth of knowledge and skill required for the successful use of MPD is typically too wide. Oil and gas companies must collaborate with the right kind of suppliers to make this technology cost-effective,” said Radhakrishnan. “Suppliers will also have to create awareness among operators on the benefits of MPD, demonstrate the life-cycle cost of installing the technology, and educate end users on offshore drilling hazards and safety issues to fight market challenges.”
Image: Logo/Frost & Sullivan Twitter
Subscribe
