GCC Drilling Fluids Market Research Report: Forecast (2023-2028)

Market Definition

Drilling Fluids also referred as a drilling mud, used in the process of drilling boreholes into the earth for various purposes like oil & gas, mining, construction, etc. The Drilling Fluids used by the oil drilling companies to drill deeper and longer wells and helps to suspend rock cutting, control well pressure, stabilize and provide buoyancy. It also helps in cooling and lubricating the wellbore, allowing rock cuttings to move smoothly to the surface.

Market Insights & Analysis: GCC Drilling Fluids Market (2023-28):

The GCC Drilling Fluids Market is projected to grow at a CAGR of around 5.9% during the forecast period, i.e., 2023-28. The market growth is attributed to a substantial increase in oil & gas exploration activities at various onshore and offshore location, which have certainly driven the need advanced Drilling Fluids for enhanced oil production. As the GCC region is a hub of oil and gas reserves globally, the requirement for oil and gas exploration is always present in the region. Additionally, as a number of new projects for oil and gas exploration activities have been announced in the regional countries such as Qatar, and Saudi Arabia, etc., the demand for Drilling Fluids would remain substantial in GCC. For instance,

• In 2022, Adnoc Drilling announced that they are planning to expand into the GCC to support Adnoc's oil production capacity target of 5 million barrels per day by 2030.

Furthermore, the increasing complexity of drilling operations and pressure in various industries like construction, mining, etc., has increased the demand for advanced Drilling Fluids, which can handle the high pressure and temperature of the drilling environment. This results in the rising demand for Drilling Fluids in the industries and supports market growth. Moreover, as the demand for high-quality fluid has increased, the requirement for advanced technology is also growing. Thus, industries like oil and gas, and construction are investing in the technologies such as hydraulic fracturing and horizontal drilling, which would continue to drive the demand for new and innovative fluid products in the region.

GCC Drilling Fluids Market Driver:

Expansion of the Allied Industries Driving Demand for Drilling Fluids in GCC Region-The rising demand for crude oil globally and the surging exploration activities of oil and gas industry in the GCC countries like Saudi Arabia, Kuwait, etc., are driving the demand for Drilling Fluids in the market. Additionally, rising onshore boring operations and expansion of offshore oil & gas fields by the countries such as Kuwait, Saudi Arabia, etc., are anticipated to further drive the demand for Drilling Fluids in the region. For instance, in 2021, Saudi Arabia’s Aramco announced the start of the development of the vast Jafurah unconventional gas field, the largest non-associated gas field in the Kingdom of Saudi Arabia. The plant is expected to initiate its production operations by 2025.

Moreover, the rising construction and mining activities in the GCC region require drilling machines to develop the projects, which certainly boosts the need for Drilling Fluids in the regional market. For instance,

• In 2023 Oman invested USD 300 million in a copper mining project.

GCC Drilling Fluids Market Opportunity:

Deepwater and Ultra-Deepwater Drilling Creating Opportunities for the Drilling Fluids Market-The increasing focus on deepwater and ultra-deepwater drilling in the GCC region presents a significant opportunity for the Drilling Fluids Market. This opportunity is driven by several factors, including the growing demand for oil and gas, advances in drilling technology, and the unique challenges presented by deepwater and ultra-deepwater drilling conditions. Companies that specialize in developing Drilling Fluids that can operate effectively in these environments and meet regulatory requirements for environmental sustainability are likely to see strong demand for their products. This presents an opportunity to innovate and develop new solutions that can meet the unique challenges of deepwater and ultra-deepwater drilling, and gain a competitive advantage in this growing market segment.

GCC Drilling Fluids Market Challenge:

Emergence of Eco-Friendly Drilling Fluids Hampering the Market Growth-The emergence of sustainable substitutes in the form of environment-friendly Drilling Fluids is hampering the market of conventional Drilling Fluids in the GCC region. The support of the government towards the sustainability approach has been enhancing the adoption of eco-friendly Drilling Fluids. Due to this, companies are integrating the sustainable approach to reduce their carbon footprint and follow the environmental regulatory norms of the country.

According to the Federal Environment Law of the UAE, parties licensed to prospect, extract or exploit onshore or offshore oil and gas fields are prohibited from discharging any polluting substance resulting from drilling. In response to these regulations, companies are focusing more on an eco-friendly approach. For instance,

• In 2023, Baker Hughes and the Abu Dhabi National Oil Company (ADNOC) signed a strategic technology collaboration agreement during ADIPEC 2022 to explore collaboration opportunities around research and development (R&D) for technologies that can help drive a sustainable future for energy in the UAE.

These approach towards sustainability require eco-friendly chemicals like green Drilling Fluids which would hinders the market growth of conventional Drilling Fluids in the coming years.

GCC Drilling Fluids Market Trend:

Shift towards Environmentally Friendly Drilling Fluids Drives Innovation in GCC Region-The Drilling Fluids industry in the GCC region has witnessed a growing trend towards the adoption of environment friendly fluids. This trend is driven by various factors such as regulatory requirements, increasing awareness of environmental impact, and a growing demand for sustainable solutions. As a result, there has been a shift towards the use of biodegradable and low-toxicity Drilling Fluids that have a reduced environmental impact. This trend is particularly relevant in the GCC region, where the drilling industry is expanding rapidly and there is a need to balance economic development with environmental concerns.

The adoption of environmentally friendly Drilling Fluids has several benefits, including a reduction in waste and pollution, lower risk to human health, and sustainability. This trend is also expected to lead to increased innovation in the industry, as companies seek to develop new solutions that are both effective and environment friendly.

GCC Drilling Fluids Market (2023-28): Segmentation Analysis

The GCC Drilling Fluids Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment. It includes predictions for the period 2023–2028 at the regional level. Based on the analysis, the market has been further classified as:

Based on Application:

• Onshore
• Offshore

The extensive availability of crude oil & gas reserves in offshore areas of the GCC region, is a prominent factor leading to an augmented use of Drilling Fluids in offshore operations. Some of the major offshore projects in the region include Safaniya Field (Saudi Arabia), Manifa Field (Saudi Arabia), Zakum Field (United Arab Emirates), and Qatargas Offshore Fields (Qatar), etc. Additionally, the growing advancement in offshore drilling and production technologies has made it more feasible and cost-effective to explore and extract hydrocarbons from offshore fields. Owing to this, a number of new offshore projects have been announced in the region, thereby booming the demand for Drilling Fluids from offshore operations. For instance,

• In 2022, Qatargas, announced a North Field East Offshore gas field expansion project, with its operations expected to begin from 2025.

Based on the Fluid Type:

• Water-based
• Oil-Based
• Synthetic Based
• Others (Air, foam, etc.)

High thermal instability of oil-based drilling fluids is a key factors driving the revenue growth of the market from this segment in GCC. Additionally, some oil & gas formations in the GCC region contain reactive shales or clay-rich formations that can swell and destabilize when exposed to water-based fluids. Owing to this, oil exploration companies increasingly use oil-based Drilling Fluids to minimize the interaction with these formations and reduce the risk of wellbore instability.

Further, the limited access to water resources, and synthetic Drilling Fluids in the country and the high cost of water treatments making oil-based drilling more cost competitive in the GCC region. Thus, these factors are consistently driving the revenue growth of the GCC Drilling Fluids Market based on oil-based segment.

GCC Drilling Fluids Market (2023-28): Regional Projections

Geographically, the GCC Drilling Fluids Market expands across:

• The UAE
• Saudi Arabia
• Bahrain
• Qatar
• Kuwait
• Oman

Saudi Arabia is experiencing substantial market growth in the Drilling Fluids industry in the Middle East. This growth can be attributed to the increasing demand for transportation fuels and power generation in the country. Significant oilfield projects like Ghawar, Safaniya, Khurais, and Shaybah are expected to play a crucial role in the expansion of the oil and gas industry in Saudi Arabia.

Furthermore, the rising number of rig counts in the country, along with the discovery of deepwater metals in the Persian Gulf and the Red Sea, is anticipated to drive the market for Drilling Fluids in Saudi Arabia in the coming years. These factors indicate a favorable market outlook and opportunities for the Drilling Fluids industry to meet the growing demands of the oil and gas sector in the country.

GCC Drilling Fluids Industry Recent Development:

• In 2022, Baker Hughes and Dussur signed an agreement to Form a Chemicals joint venture in Saudi Arabia to increase efficiencies, enable greater access and generate faster delivery time for customers.
• In 2022, Schlumberger announced they gained a contract award from Saudi Aramco for integrated drilling and well construction services in a gas drilling project.

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