US demand to reach nearly $44 billion in 2014
US demand for drilling products and services is forecast to reach nearly $44 billion in 2014. Advances will be promoted by an expected recovery in domestic oil and gas drilling activity as oil prices stabilize at a relatively high level and the US aims to reduce its reliance on foreign sources of oil. However, the long-term impact of the April 2010 Deepwater Horizon disaster in the Gulf of Mexico -- which has already prompted new offshore safety requirements and is expected to bring about significant legislative activity -- is yet to be determined. The Gulf of Mexico accounted for nearly $6 billion in drilling revenues in 2009.
Tubular goods to provide best equipment opportunities
Drilling equipment and consumables account for the largest share of the drilling products and services market. Through 2014, equipment demand is projected to slow from the pace of the 2004- 2009 period, restricted by the cyclical drilling rigs segment, as spending on new rigs returns to a more sustainable level after a purchasing boom that took place over the 2006-2009 period. However, the expansion of drilling activity and the large pool of aged rigs approaching retirement will ensure a sizable ongoing market for new drilling rigs through 2014. Among other drilling equipment and consumables, tubular goods will provide the best opportunities for growth through the forecast period, benefiting from increased drilling activity, particularly in the number of wells and the footage drilled, which directly influences the consumption of casing. Although the short term outlook for tubular goods will be negatively affected by an inventory overhang, the supply situation is expected to improve by 2014. Market value will be further supported by antidumping and countervailing duties placed on tubular goods produced in China.
Services to account for most new drilling revenues
Drilling services are projected to account for more than three-quarters of overall demand gains in the US drilling products and services market through 2014. Market expansion will be driven by the high cost of drilling marginal wells. A key driver for such costs is the increasing reliance on technology when drilling to optimize production from poorer hydrocarbon resources. Techniques such as horizontal and directional drilling, measurement-while-drilling to ensure accurate drill string placement, and drilling deeper wells in more difficult conditions all tend to raise the costs of drilling oil and natural gas wells.
All four US regions have positive market outlooks
The US market for drilling products and services is concentrated in the Southern region, which possesses the majority of the oil and natural gas wells drilled. The Western region will benefit from the rising amount of drilling activity directed at natural gas in the Rocky Mountain states. Possessing a drilling products and services market similar in size to the Western region, the Midwestern region will benefit from the advanced technology required to service the large number of deep horizontal wells in North Dakota. Although the Eastern region will continue to account for the smallest share of demand, the area will benefit from new activity in the Marcellus Shale, a major source of natural gas.
Study coverage
This new US industry study presents historical demand data (1999, 2004 and 2009) plus forecasts for 2014 and 2019 by type and US region. The study also considers market environment factors, evaluates company market share and profiles industry competitors.
Industrial Equipment Industry in the United States
TABLE OF CONTENTS
INTRODUCTION x
I. EXECUTIVE SUMMARY 1
II. MARKET ENVIRONMENT 4
General 4
Macroeconomic Environment 5
Petroleum & Natural Gas Outlook 9
Petroleum 12
Exploration & Reserves 14
Production 16
Drilling 20
Pricing 23
Natural Gas 25
Exploration & Reserves 27
Production 29
Drilling 33
Pricing 35
Drilling Outlook 37
Drilling Rigs 39
Historical Market Trends 41
Pricing for Selected Drilling Products & Services 43
Environmental & Regulatory Considerations 45
Foreign Trade 48
International Environment 50
World Oil & Gas Reserves 51
Petroleum 52
Natural Gas 54
World Oil & Gas Production 56
World Oil & Gas Drilling 59
World Drilling Products & Services Outlook 61
III. OVERVIEW 62
Supply & Demand 62
Drilling Technology 64
Directional Drilling 66
Horizontal Drilling 67
Expandable Technologies 68
Drilling with Casing 69
Downhole Technologies 70
Coiled Tubing Drilling 71
Dual-Gradient Drilling 72
Other Drilling Technologies 73
Drilling Fluids 74
Unconventional Sources of Natural Gas 76
Coalbed Methane 76
Tight Gas 77
Shale Gas 78
Other Oilfield Technologies 78
IV. DRILLING EQUIPMENT & CONSUMABLES 80
General 80
Tubular Goods 83
Drilling Rigs 87
Downhole Tools 90
Drill Bits & Reamers 94
Pumps & Valves 97
Other Equipment & Consumables 100
Market Share 102
V. DRILLING SERVICES 105
General 105
Contract Drilling 107
Logging & Measurement Services 110
Directional Drilling Control Services 113
Other Drilling Services 114
Market Share 118
VI. DRILLING FLUIDS 122
General 122
Product Characteristics 123
Demand by Type 126
Water-Based 127
Synthetic-Based 128
Oil-Based 129
Demand by Location 131
Demand by Region 133
Market Share 134
VII. REGIONAL MARKETS 137
General 137
Oil & Gas Drilling Activity by Resource, Region & Location 141
Drilling Products & Services Demand by Location 143
Onshore 144
Offshore 145
Deepwater 146
Drilling Products & Services Regional Overview 147
Southern Region 148
Drilling Activity Overview 148
Drilling Products & Services Demand 149
Texas 150
Gulf of Mexico 151
Louisiana 152
New Mexico 152
Arkansas 153
Mississippi & Alabama 154
Western Region 154
Drilling Activity Overview 154
Drilling Products & Services Demand 156
Colorado 157
Wyoming 158
California 159
Utah 159
Alaska 159
Montana 160
Other Western States 160
Midwestern Region 161
Drilling Activity Overview 161
Drilling Products & Services Demand 162
Oklahoma 163
North Dakota 164
Other Midwestern States 164
Eastern Region 165
Drilling Activity Overview 165
Drilling Products & Services Demand 166
Pennsylvania 167
West Virginia 168
Other Eastern States 168
VIII. INDUSTRY STRUCTURE 170
General 170
Industry Composition & Market Share 174
Mergers & Acquisitions 177
Marketing & Distribution 180
Research & Development 182
Competitive Strategies 184
Company Profiles 186
Aibel AS 187
Aker Solutions ASA 188
Atlas Copco AB 192
Baker Hughes Incorporated 194
BICO Drilling Tools, see Schoeller-Bleckmann Oilfield
Equipment
BJ Services, see Baker Hughes
Cameron International Corporation 201
Canrig Drilling Technology, see Nabors Industries
Chem-Tech, see Schlumberger and Smith International
Columbia Oilfield Supply, see Precision Drilling
Diamond Offshore Drilling, see Loews
Drilling Controls, see Aibel
Epoch Well Services, see Nabors Industries
Excalibar Minerals, see Newpark Resources
General Electric Company 205
GEO Drilling Fluids Incorporated 208
Geoservices, see Schlumberger
Grant Prideco, see National Oilwell Varco
Grey Wolf, see Precision Drilling
Halliburton Company 210
Helmerich & Payne Incorporated 213
Hughes Christensen, see Baker Hughes
Hydril Pressure Control, see General Electric
INTEQ, see Baker Hughes
Lafarge SA 215
LeTourneau Technologies, see Rowan Companies
Loews Corporation 217
M-I SWACO, see Schlumberger and Smith International
Nabors Industries Limited 219
National Oilwell Varco Incorporated 223
Newpark Resources Incorporated 233
NOV Intelliserv, see National Oilwell Varco and
Schlumberger
OAO TMK 235
Parker Drilling Company 237
Patterson-UTI Energy Incorporated 238
Peak Oilfield Services, see Nabors Industries
Precision Drilling Corporation 240
Quail Tools, see Parker Drilling
Rostel Industries, see Precision Drilling
Rowan Companies Incorporated 243
Sandvik AB 246
Schlumberger Limited 248
Schoeller-Bleckmann Oilfield Equipment AG 255
Smith International Incorporated 258
Sperry Drilling Services, see Halliburton
Spirit Drilling Fluids, see National Oilwell Varco
Spirit Minerals, see National Oilwell Varco
T-3 Energy Services Incorporated 264
Technip SA 267
Tenaris SA 269
United States Steel Corporation 271
V&M STAR, see Vallourec
Vallourec SA 273
VAM Drilling France, see Vallourec
VetcoGray, see General Electric
Weatherford International Limited 277
Other Companies Active in the Industry 280
LIST OF TABLES
SECTION I -- EXECUTIVE SUMMARY
Summary Table 3
SECTION II -- MARKET ENVIRONMENT
1 Macroeconomic Indicators 8
2 US Petroleum & Natural Gas Production 10
3 US Petroleum Supply & Demand 14
4 Petroleum Drilling Indicators 22
5 US Natural Gas Supply & Demand 27
6 US Natural Gas Drilling Indicators 34
7 Active Drilling Rigs & Well Completions 39
8 Drilling Rigs 40
9 Drilling Products & Services Market, 1999-2009 42
10 Pricing for Selected Drilling Products & Services 45
11 Drilling Equipment & Consumables Foreign Trade 50
12 World Petroleum Reserves by Country, 2009 53
13 World Natural Gas Reserves by Country, 2009 55
14 World Oil & Natural Gas Production 59
15 World Oil & Natural Gas Drilling Activity 60
SECTION III -- OVERVIEW
1 Drilling Products & Services Demand 63
SECTION IV -- DRILLING EQUIPMENT & CONSUMABLES
1 Drilling Equipment & Consumables Demand 82
2 Tubular Goods Demand by Product & Region 87
3 Drilling Rig Demand by Type & Region 90
4 Downhole Tool Demand by Product & Region 94
5 Drill Bit & Reamer Demand by Product & Region 97
6 Pump & Valve Demand by Product & Region 100
7 Other Equipment & Consumables Demand by Region 102
SECTION V -- DRILLING SERVICES
1 Drilling Services Demand 106
2 Contract Drilling Demand by Location & Region 109
3 Logging & Measurement Services Demand by Type & Region 112
4 Directional Drilling Control Services Demand by Region 114
5 Other Drilling Services Demand by Type & Region 118
SECTION VI -- DRILLING FLUIDS
1 Drilling Fluid Demand 123
2 Selected Drilling Fluid Additives 125
3 Drilling Fluid Demand by Type 126
4 Water-Based Drilling Fluid Demand 128
5 Synthetic-Based Drilling Fluid Demand 129
6 Oil-Based Drilling Fluid Demand 130
7 Drilling Fluid Demand by Location 133
8 Drilling Fluid Demand by Region 134
SECTION VII -- REGIONAL MARKETS
1 US Oil & Gas Producing Regions 140
2 Oil & Gas Drilling Activity by Resource, Region & Location 143
3 Drilling Products & Services Demand by Location 144
4 Drilling Products & Services Demand by Region 148
5 Southern Region Drilling Rigs in Use 149
6 Southern Region Drilling Products & Services Demand 150
7 Western Region Drilling Rigs in Use 155
8 Western Region Drilling Products & Services Demand 157
9 Midwestern Region Drilling Rigs in Use 161
10 Midwestern Region Drilling Products & Services Demand 163
11 Eastern Region Drilling Rigs in Use 166
12 Eastern Region Drilling Products & Services Demand 167
SECTION VIII -- INDUSTRY STRUCTURE
1 US Drilling Products & Services Sales by Company, 2009 172
2 Selected Acquisitions & Divestitures 179
3 Research & Development Expenditures for Selected Drilling
Product & Service Firms 184
LIST OF CHARTS
SECTION II -- MARKET ENVIRONMENT
1 Natural Gas & Crude Oil Prices, 1999-2009 11
2 US Petroleum Reserves, 1999-2009 16
3 US Petroleum Production, 1999-2009 17
4 Crude Oil Producing States, 2009 19
5 Petroleum Drilling Indicators, 1999-2009 22
6 Crude Oil Prices, 1999-2009 25
7 US Natural Gas Reserves, 1999-2009 29
8 US Natural Gas Production, 1999-2009 31
9 Natural Gas Producing States, 2009 32
10 US Natural Gas Drilling Indicators, 1999-2009 34
11 Natural Gas Prices, 1999-2009 36
12 Drilling Products & Services Market, 1999-2009 43
SECTION III -- OVERVIEW
1 Drilling Products & Services Demand by Type, 2009 64
SECTION IV -- DRILLING EQUIPMENT
& CONSUMABLES
1 Drilling Equipment & Consumables Demand by Type, 2009 83
2 Drilling Equipment & Consumables Market Share, 2009 104
SECTION V -- DRILLING SERVICES
1 Drilling Services Demand by Type, 2009 107
2 Drilling Services Market Share, 2009 121
SECTION VI -- DRILLING FLUIDS
1 Drilling Fluid Market Share, 2009 136
SECTION VIII -- INDUSTRY STRUCTURE
1 US Drilling Products & Services Market Share, 2009 174
