Riyadh – Mubasher: Saudi Arabia is forecast to dominate the drilling rigs’ market during the period from 2021 until 2026, backed by an increase in output, advancements in technologies, and high efficiency in aiding oil and gas production.

A recent report by Research and Market expected the drilling rigs’ industry in Saudi Arabia to grow at a compound annual growth rate (CAGR) of more than 1.5% during the 2020-2025 period.

Saudi Arabia accounts for 18% of the world's proven petroleum reserves, being among the largest drilling rigs worldwide.

Increasing investments in the sector will likely back the market, yet unstable prices of crude oil and natural gas, which lead to a decrease in exploration and production activities, could restrain the growth of the market.

Natural gas production in the Kingdom would continue to be a vital part of meeting global energy demand, increasing by 1.4% to 11 billion cubic feet per day in 2019 from 10.85 billion cubic feet per day a year earlier.

Developing the smart rigs technology, like the advancements in the automated drilling rigs, would endorse the oil and gas output to be more viable with a possibility to provide an opportunity for market players.

“New rigs are being placed in the Persian gulf to extract crude oil and natural gas from the area, and this is expected to aid the growth of the offshore in the forecast period,” according to Research and Market.

Offshore rigs meanwhile rose 2.3% to an average of 18.583 in 2019, compared to 18.166 in 2018. The report predicted an increase in the number of offshore until 2026, which will back the growth of the market.

Saudi Arabia’s crude oil production declined 3.5% to 556.6 million tonnes in 2019 from 576.8 million tonnes in 2018. The decrease in oil output may act as a restraint on the Kingdom’s drilling rigs industry.

“The offshore segment is expected to witness growth in the forecast period due to an increase in investments, increasing units of rigs, and advancement in technology,” according to the report.