Downhole Tools Market size was valued at USD 4.21 Billion in 2023 and is expected to exceed USD 8.24 Billion by 2036, expanding at over 5.3% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of downhole tools is assessed at USD 4.42 Billion. Downhole tools play a crucial role in oil and gas production and suffice the increasing energy demand. These tools are used at various stages of production, such as improving well performance, optimizing production rates, and ensuring safe extraction. In 2023, global oil demand is predicted to rise by 1.9 million barrels per day. Moreover, the need for crude oil and biofuels is expected to rise by around 102 million barrels per day in 2023.
Technological advancements have played a pivotal role in unlocking the potential of unconventional resources, such as shale oil and gas. Therefore, the rising demand for unconventional resources significantly augments the demand for downhole tools. Specialized downhole tools, like advanced drill bits, MWD tools, and perforating guns, are experiencing higher demand as the operators seek to maximize the production of shale gas. On the other hand, the use of downhole tools in mining and geothermal energy will also drive market growth. With the help of these tools, valuable data regarding temperature, pressure, and rock properties can be extracted. This data helps in optimizing the drilling and management of reservoirs.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
5.3% |
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Base Year Market Size (2023) |
USD 4.21 Billion |
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Forecast Year Market Size (2036) |
USD 8.24 Billion |
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Regional Scope |
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Tool Type (Handling, Flow & Pressure Control, Drilling, Impurity Control, Downhole Control)
The drilling segment is predicted to hold a tremendous share of about 35% and the highest revenue in the year 2036. Rising demand for drilling equipment will drive the segment gain. Leading jack-up fleet operators predict global demand for modern jack fleets to exceed 95% in the coming quarters. The demand for drilling equipment is rising due to many factors, such as growing energy demand, improved living standards, higher reliance of the transportation sector on oil & gas, and low widespread of renewable energy resources.
Application (Drilling, Completion, Intervention, Formation & Evaluation)
Downhole tools market from the drilling segment is expected to garner a notable proportion of around 40% in the year 2036. The rising discovery of liquids and gas is contributing to the segment’s expansion. Discovered liquids make up for around 1 billion boe, or about 70% of global volumes in 2022, while the quantity of gas discovery was roughly 550 million boe. Downhole seismic tools, such as geophones, and accelerometers are used for conducting to map the subsurface geological structures before drilling. It helps in finding potential hydrocarbon reservoirs.
Our in-depth analysis of the global market includes the following segments:
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Tool Type |
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Location |
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Application |
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Middle East & Africa Market Forecast
The downhole tools market in the Middle East & Africa is projected to be the largest with a share of about 31% by the end of 2036. Rising demand for equipment will drive the market extension in the region. As Saudi Arabia and the UAE invest billions to meet production capacity targets, the demand for lang rigs is expected to receive a substantial rise of 25% from 2023-2027. Furthermore, the growing demand for oil and the need to increase its production is rising the demand for such tools. For instance, downhole drill bits are used to cut through rock formations during the drilling procedure of wells.
APAC Market Analysis
The Asia Pacific downhole tools market is estimated to be the second largest, registering a measure of nearly 27% by the end of 2036. Rising investment in drilling and services, such as well intervention. To meet expanding oil & gas demand, China's national oil corporations (NOCs) are projected to invest more than USD 120 billion in drilling and well services between 2021 and 2025. With this investment, the region is likely to drill around 118,000 wells by 2025. Increased intervention allows for a greater focus on well intervention operations, such as production optimization, stimulation, and reservoir management.
North American Market Forecast
North America downhole tools market size valued at more than 2 billion in 2022. Technological advancement of machinery is going to boost the market growth in the region. The adoption of digital technologies and data analytics, such as real-time data collection, optimization, and transmission has transformed the oil & gas industry of North America.
Author Credits: Dhruv Bhatia
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