Onshore Drill Pipe Revenues To Boost With The Advent Of Ai In Oil And Gas Exploration

Drilling pipes business is observing considerable growth owing to adoption of real time optimization technologies and rising exploration activities. As an approach towards technological innovation and digitization in oil and gas sector, adoption of Artificial Intelligence (AI) has created a paradigm shift. As per the society of petroleum engineers, AI has allowed for a drastic improvement in the drilling methods encompassing fewer physical activities from drillers by accomplishing the task with machine and automated decision making process. Moreover, AI is being largely deployed for real time drilling optimization, predictive maintenance, locating new reserves, determining the exploration and production life cycle and capacity of drilling in oil and gas sector.

Drilling is considered a risky and expensive investment. Real time optimization and predicting new reserve location through AI has helped to overcome such challenges in the market thereby allowing swift investment flows and lowering wastage of capital by reducing the chance of project failure. This has helped the explorers to divest their revenue flow towards new onshore exploration and drilling operation across the globe, thereby impacting the market growth of drilling pipes. The market of onshore drilling pipes market is expected to grow with a CAGR of 3.2% during the forecast period 2019-2026.

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Exploration of new oil and gas reserves offering opportunities to onshore drilling pipes

Furthermore, demand for onshore drilling pipes can be observed to increase specifically in North American (due to rising tight oil production) and Asia Pacific region owing to rising exploration and production activities. For instance, as per the US Energy Information Administration, surge in global natural gas production by OECD and non-OECD countries can be expected to rise from about 120 trillion cubic feet in the year 2012 to about 130 trillion cubic feet in 2020. Further, as per administration, petroleum and other liquid fuels are expected to contribute 30% of world energy consumption by the year 2040 thereby creating a high demand for drilling activities in the forecast years. Further, the global natural gas production is expected to rise to about 210 trillion cubic feet by the year 2040.

Moreover, according to the US Energy Information Administration, US crude oil production surged from December 2014 to December 2017 by 9.4 million barrels per day to 10.04 million barrels per day respectively. In the same year (2017), tight oil production accounted to about 54% of total crude oil production due to increasing productivity of new wells as a result of new exploration.  This surge in new oil exploration activities and production capacity are expected to further boost the demand for onshore drilling pipes during the forecast years.