Drilling & Well Services Expenditure: Onshore Continues to Drive Growth
The global DWS market is expected to see a sustained recovery over 2018-2022, led by a rebound in onshore US activity, according to Westwood Global Energy Group’s latest World Drilling & Well Services Market Forecast report, complemented by the online Sectors DWS data module.
Global Drilling and Well Services Expenditure Onshore/Offshore Split 2013-2022
- Total global expenditure over 2018-2022 is expected to amount to $1.4 trillion.
- Global onshore expenditure is expected to rise at a rate of 8% per year, while offshore will rise at 0.4% per year.
- North America accounted for 42% of global DWS expenditure over 2013-2017, rising to 52% over 2018-2022.
- Outside of North America, Latin America will see the strongest compound annual growth rate for onshore DWS expenditure over the forecast at 11% – largely driven by Argentina.
- The outlook for offshore DWS expenditure remains constrained despite recent improvements, following a decline in rig day rates and a light backlog of projects which have passed FID.
- Rig & crew services is expected to account for 25% of global DWS expenditure over 2018-2022, while expenditure for stimulation services will see the strongest growth over the forecast period (11%).
Westwood Global Energy Group’s World Drilling & Well Services Market Forecast presents the latest view on prospects for one of the largest areas of total oilfield services expenditure. The new report, covering 2013-2022, shows forecast expenditure totalling $1.4 trillion and growing at a 7% CAGR.
North American DWS expenditure is expected to rise at a CAGR of 11% through to 2022, representing 52% of the global market over the forecast period. The outlook for North America is buoyed by strong activity growth in the US onshore plays, with the combined effect of volume and pricing growth since 2016 expected to continue through the forecast
Outside of North America, international DWS expenditure over 2018-2022 is expected to total approximately $686bn, with a CAGR of 2% forecast over the same period. This is due largely to a stagnation in the offshore rig & crew market, which is expected to see minimal uplift in utilisation (and hence pricing) of mobile offshore drilling units (MODUs) other than in some niche applications and geographies. Onshore, divestment away from mature assets in China will stunt growth, while the majority of regions outside of North America will see annual compound growth in the low single-digits through to 2022. The exception is Latin America, where operators in Argentina’s Vaca Muerta shale are targeting a substantial increase in both drilling and production as a function of planned investment in rail infrastructure, driving regional onshore compound growth of 11% per year.
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