World Drilling & Well Services - Market Forecast - 2019-2023 Q1

The recovery in drilling activity that began in 2017 continued in 2018 with expenditure of $229bn. This was predominantly driven by aggressive growth in onshore activity in the US. North America accounted for 41%

of global onshore expenditure over 2014-2018. Over the forecast period, North American onshore DWS expenditure is expected to rise at a CAGR of 8% as a result of improving project economics, and a return of investor confidence in US shale plays.

Other key regions for onshore drilling expenditure are Asia (driven by China) and Eastern Europe (driven by Russia). There is large upside potential in China where the government has set ambitious shale drilling targets.

Due to the long lead times associated with offshore projects, the recovery in activity offshore has lagged
behind that of onshore and 2018 represented the lowest year for DWS expenditure since 2006. Despite

this, the sanctioning of a number of projects in 2018, highlights a positive growth in offshore drilling for the forecast. Offshore activity will grow at a 3.2% CAGR over the forecast, reaching $63bn by 2023, 16% higher than 2018.