The Asia-Pacific drilling waste management services market is expected to grow at a CAGR of more than 2% throughout 2020 - 2025. Factors such as upstream activities, particularly exploration and drilling activities, which continue to expand across the Asia-Pacific, are set to increase the demand for oilfield services in the region. The upcoming drilling activities across the region are likely to augment the drilling waste management services market in the coming years. Increasing government regulations, such as reducing pollution because of the release of harmful gases and landfills during drilling activities, are expected to drive the drilling waste management services market during the forecast period. However, the lack of skilled labor and high initial investments are some of the factors restraining the market from growth.
- Crude Growing drilling activity, particularly offshore drilling activity, is expected to drive the drilling waste management services market during the forecast period. Also, the offshore drilling waste management is highly capital intensive, as compared to that of onshore services.
- Increase in the exploration and production (E&P) activities in deep-water and ultra-deepwater reservoirs is expected to increase the number of wells drilled, and drive the demand for the oilfield services, thereby creating the opportunity for the Asia-Pacific drilling waste management services market.
- China is expected to lead the drilling waste management services market during the forecast period owing to extensive and widespread exploration and production activities in the region, especially in the South China sea.
Key Market Trends
Offshore Segment to Witness Significant Growth
- The offshore oil and gas sector generates a variety of solid and liquid wastes. Some of these wastes are attributable to exploration and production (E&P) activities (drilling wastes, produced water, treatment, and workover fluids), while others are due to general industrial operation.
- Of the total waste produced from the offshore drilling activity, over 85% of them are hazardous. Also, the offshore drilling waste management is highly capital intensive, as compared to that of onshore drilling waste management.
- During offshore drilling, drilling fluid requirements are precise. To meet these requirements, the drilling fluid comprises of many different chemicals, which can be hazardous to the environment if released untreated.
- Moreover, in 2019, the B-80 offshore development project, in Mumbai offshore basin India, involves drilling, well completion, re-entry, and offshore hook-up of three existing wells, namely B-80-1, B-80-2, and B-80-4ST, as well as the drilling and offshore hook-up of six new subsea wells in the Panna reservoir sands. More new projects related to the drilling are expected to be initiated and completed in the forecast period and may provide growth to the market.
- Furthermore, the offshore rig count in the Asia-Pacific region is estimated by Baker Hughes Company to be around 92 units. An increase in exploration and production in areas such as the South China Sea and Bay of Bengal may aid the growth of the offshore segment of the market.
- Adding to this, offshore exploration activities are growing in the South China Sea region and ASEAN region, which positively influences the market. Population expansion, becoming the industrial base, and increasing energy demand is expected to boost the market in the coming years.
China to Dominate the Market
- China was the largest producer of oil in the region in 2019. It is also among the largest user of drilling techniques, which, among others, are used in the economically viable recovery of unconventional sources of hydrocarbons in the country's shale plays. This is because shale oil and gas reservoirs are more complicated to handle and produce a considerable amount of hazardous waste. Therefore, unconventional reservoirs wells require higher usage of drilling waste management services to provide the oil.
- Crude oil production in the country has increased by 1.0%, to 191.0 million tonnes, in 2019 from 189.1 million tonnes in 2018. The output may increase further in the forecast period and boost the China drilling waste management services market.
- Starting in 2020, China is expected to allow foreign companies to explore for and produce oil and gas in the country. Opening the industry to international firms is likely to allow international firms registered in China with net assets of USD 43 million to take part in oil and gas exploration and production. The inflow of foreign funds and expertise is expected to aid the growth of the market.
- In 2019, the staged fracturing completion in open hole horizontal wells had been developed most rapidly. This technology is featured by opening a plurality of fracturing sliding sleeves with one ball like Halliburton RapidFra, which opens upto six sliding sleeves. Chinese domestic large oil companies such as PetroChina and Sinopec have started research on this technology and initially carried out field tests and applications. The advent of new technologies is expected to open new sources of oil and gas and make the extraction cheaper, thereby aiding the market's growth.
- Hence, China is expected to dominate the market in the forecast period due to an increase in production, advancements in technologies, and high efficiency in aiding oil and gas production.
The Asia-Pacific drilling waste management services market is moderately fragmented. Some of the key players in this market are Schlumberger Ltd., Halliburton Company, Baker Hughes Company, Weatherford International plc, and China Oilfield Services Ltd.
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