The Global Offshore Rental Equipment Market size is estimated at USD 2.22 billion in 2023 and is predicted to reach a value of USD 3.73 billion by 2029 from USD 2.42 billion in 2024, with a CAGR of 9.01% during the foreseen period 2024-2029.
The worldwide offshore rental equipment market is supposed to experience significant expansion over the next five years due to escalated investment in deep and ultra-deep waters, especially in the Gulf of Mexico and the North Sea region. Worldwide, energy demand is predicted to grow rapidly in the foreseeable future due to high consumption rates, mainly in emerging BRICS economies and Southeast Asia. Offshore drilling activity around the world has escalated in recent years, with oil and gas companies focusing on developing untapped reserves in West Africa and Latin America. Strict government regulations and environmental standards in countries such as the UK, the US, and Norway have forced oil and gas companies to use the best possible products that meet safety standards. This has made offshore equipment leasing a viable option for contractors rather than purchasing, as this results in lower equipment costs.
The global market for offshore rental equipment is predicted to take advantage of significant investments by leading offshore oil and gas service companies as a result of the growing need for price-competitive solutions. The rental equipment finds application mainly in drilling activities, which require expensive machinery for its execution. High oil and gas prices have forced entrepreneurs to optimize their extraction activities. Rental equipment has proven to be effective in efficient inventory management and significant capital savings. The worldwide call for offshore rental equipment is supposed to show strong expansion driven by consumption in key emerging markets. More expansion opportunities will emerge between 2021 and 2026 compared to the past five years, suggesting a rapid pace of change. Companies that adapt quickly to this changing landscape emerge as the top performers and generate lucrative revenues.
The call for custom products is predicted to increase with an escalating number of contractors opting for the same solution due to different operating conditions at various drilling sites under different weather conditions. These factors are predicted to drive the expansion of the global offshore rental equipment market in the future. High capital expenditures coupled with rising customization costs are likely to have a negative effect on this industry in the next five years. Expansion activities on existing reserves, coupled with the increasing development of untapped reserves, are predicted to provide colossal opportunities for players in the offshore rental equipment market during the conjecture period.
Escalating investments in ultra-deep-sea areas and escalating call for energy are considered to be the two main factors driving the development of the global offshore rental equipment market. Another factor that could play an important role in the expansion of the worldwide market is the common tendency to lease equipment instead of buying it for drilling contracts. Economies such as the UK and Norway have directed exploration companies to adhere to safety regulations drawn up by their governments. In this sense, they are required to comply with specific security parameters. Equipment rental companies have relied on this government law and designed devices that already meet safety standards. As there are additional costs associated with customizing rental hardware, industry players may face minimal restrictions in the form of high initial capital expenses. However, there is a wide variety of rental equipment available in the market, viz., test plugs, cup testers, the-water, rotating subwoofers, and drill collars that are classified as drilling equipment.
Since the COVID-19 pandemic has severely affected most industries, the expansion of this industry also suffered a major crisis in 2021. The worldwide market for offshore rental equipment has also been through an investment crisis. This restricted the growing industry. As new reserve sites are explored, they need a modern approach and new technology, oil and gas companies call for custom drilling equipment to meet worldwide production standards, which restricts the market for offshore rental equipment.
Call in the energy sector is likely to grow at a faster rate during the foreseen period. The call for oil and gas has the same luck, which is why exploration increases in this regard. This oil and gas exploration requires expensive technology and machinery to perform the extraction and drilling. It is not possible to buy these expensive machines in the short term. Thus, the rental of this equipment becomes a suitable option that saves time and money. Governments also support renewable energy. The traditional equipment employed is not fully equipped to meet the calls of modern needs. New technologies, such as horizontal drilling, have played a vital role in the formation of oil and gas. They are the main drivers of expansion and the main drivers of the worldwide offshore rental equipment market. Drilling activity in all offshore regions has escalated over the years. Therefore, companies are investing more in this industry. Untapped reserves are attracting the attention of players, and many countries are expanding their reserves. This factor plays a central role in the expansion of the worldwide offshore rental equipment business.
Challenges such as buyers' rising bargaining power and the emphasis on high-quality products at low prices are forcing major changes in the offshore rental equipment supply chain.
The effects of COVID-19 have also been felt in the oil and gas industry. From individuals sent on leave to companies facing drastic changes in their long-term plans, everyone has had to adapt. The impact is particularly notable with respect to offshore oil rigs. Potential clients try to terminate contracts. While the exact reasons may vary, with some customers reporting applicable legal restrictions and others reporting virus issues, the trend continues. Many laws and regulations related to drilling cover a variety of circumstances, but relatively few provide advice on how to deal with a worldwide pandemic.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 – 2029 |
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Base Year |
2023 |
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Forecast Period |
2024 - 2029 |
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CAGR |
9.01% |
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Segments Covered |
By Product Type and Region. |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
Norwegian Offshore Rental AS, Aquaterra Energy, Weatherford International, Ferguson Group, and Others. |
Drilling equipment was the most important product segment in 2021, and the trend is predicted to continue due to escalated exploration and production activities in hydrocarbons. The profitability associated with leasing offshore drilling equipment compared to purchasing it, as it reduces maintenance costs, is supposed to benefit the expansion of this segment further.
North America was the top consumer of offshore rental equipment in 2021, and the trend is likely to continue during the forecast period due to the growing demand for energy efficiency in the region. The United States is predicted to be the pioneer of the future due to increased exploration and production of shale gas and the expansion of ultra-deep drilling activity in the Gulf of Mexico region. Technological advances in product design and operation are predicted to increase the expansion of the industry in this region.
The Asia-Pacific region is supposed to experience significant expansion in the future due to the rising number of oil and gas exploration and production projects in the region. China, India, and Indonesia are predicted to be the main markets due to developments in the region's discovery and extraction of shale gas and CBM. Africa is estimated to experience above-average market expansion due to escalated oil and gas production associated with several new entrants in the region. These include Angola and Mozambique, which have augmented their oil and gas production rates in recent years. The Middle East is predicted to see significant industrial expansion due to escalated production capacity, especially from the OPEC countries, as well as the region's growing energy exports.
The offshore rental equipment industry is highly consolidated, with few major participants dominating the global market. Key players operating in the global offshore rental equipment market include
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