The global oil and gas drill bit market was valued at more than USD 4.9 billion in 2014. Increasing global demand for energy is expected to drive the demand for drill bit as exploration and production especially for shale gas are anticipated to rise over the forecast period. Increasing offshore drilling activities in the U.S. and the Middle East is anticipated to augment product demand over the forecast period.
They are cutting tools used to create holes onshore and offshore as well. They are available in various shapes and sizes made of different materials such as diamond, carbide, and tungsten. As exploration of unconventional sources such as CBM, shale gas has been increasing owing to rapid increase in global energy demand and several initiatives from various governments production from these reserves is expected to rise in the near future, hence driving substantial demand for drill bits.
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Various technological developments and product launches such as Terr Adapt adaptive drill bit and hybrid drill bits that combines the characteristics of technologies such as polycrystalline diamond bits (PDC) some of the new products in the market. Application of these new products has been increasing in directional drilling and large diameter drilling operation. Effective selection of drill bit type and in-depth testing of material has proven in cost saving and hence escalated overall profit.
The dip in the oil prices in the last few years has tremendously affected the E&P in oil and gas sector, hence restricting the development of new technologies in the drill bit industry. Growing concern of E&P companies to reduce operating costs along with rising requirement for optimized drilling performance have enforced OEM manufacturers to improvise bit design and performance. Changing customer preference for cost-effective equipment owing to of technological advancements have created opportunities for future development. Also, sustainability of the market depends on the supply of raw materials, product development and majorly on the prices.
Product Insights:
On the basis of product different types of drill bits are that have been considered include fixed cutter bits and roller cone cutter. Roller cone bits are sub-divided into tungsten carbide bits and milled-tooth bits. Also, the fixed cutter are further divided as polycrystalline diamond bits (PDC) and natural diamond bits. Roller cone bits are more efficient in soft formations as compared to other down-hole tools. Recent developments of sealed bearings are corrosion free and have minimum failure risks.
Milled-tooth cutting is applicable for scraping exploitation in soft formation. While Tungsten Carbide inserts are used for hard-facing and gauge protection from abrasion failure And these inserts have better durability even in extreme hard formation.
PDC bits are leading product segment in the North American market owing to increased efficiency, durability, higher penetration level of more than 3000 meters and drilling operations, despite its higher costs. The demand has been increased in U.S. and Canada owing to their phenomenal properties. This type of bits is significantly being employed in the present scenario as they assist in less operating time in drilling by reducing any shear and tear.
Roller cone drills have largest product segment covering more than 70% of the market share globally in 2014, and is anticipated to cross over net worth of USD 1060 million by 2022. R These bits are used to drill downhole by cutting or fracturing with tooth-shaped elements. Cost effectiveness of the application of these bits is the primary factor anticipated to drive the market in the next eight years. However, they can lose market share as fixed cutters are more effective for encountering hard rock even for deeper wells.
Unlike roller cutters, fixed cutters are made up of hard materials such as natural or synthetic diamonds for grinding and scrapping of rocks by rotary actions. Their demand is expected to grow at a CAGR of more than 5.5% from 2015 to 2022.
Regional Insights:
On regional basis segmentation, North America drill bit dominates the global market with around 35% of global volume in 2014. Tremendous upsurge in shale gas production is expected to be yet another major driving factor in the current low crude oil price scenario.
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