India Oilfield Services Market Assessment, By Type, By Services, By Application, By Region, Opportunities and Forecast, FY2017-FY2031F

India oilfield services market is projected to witness a CAGR of 12.50% during the forecast period from FY2024 to FY2031, growing from USD 628.99 million in FY2023 to USD 1,613.85 million in FY2031. The rapid shift in crude oil prices at a global scale has impacted the Indian market. Already rising demand for fossil fuel due to increased population and higher adoption of passenger vehicles are enabling challenges for the industry. The depleting hydrocarbon resources are pushing authorities to dig deeper and seek new energy resources. It results in the expansion of offshore oil rig fleets and onshore drilling in anticipated regions. Furthermore, the onshore exploration programs in regions, such as Assam, Nagaland, Arunachal Pradesh, Gujarat, and Tamil Nadu, are running under the supervision of government entities and firms like Oil India Limited (OIL) and Oil and Natural Gas Corporation (ONGC).

Offshore oil drilling is expected to hold higher potential due to lower depletion and higher production potential. The ultradeep and deepwater oil drilling in the seabed is expected to deliver the rising consumption and demand for hydrocarbon fuel. The state firms along with the help of private rig-builders are investing billions in offshore deepwater exploration to attain the self-reliant energy model.

For instance, in May 2023, the Oil and Natural Gas Corporation (ONGC) won two major offshore oil and gas discoveries in the Arabian Sea. These blocks are named Amrit and Monga and are won in the first and third open acreage licensing policies (OALP) auction.

Demand for Affordable Fuel and Increased Sales of Automotives to Propel the Market Growth

The rise of oil and gas tariffs along with the disruptions in the supply chain are increasing the prices of crude oil. Therefore, nations are trying to locate and explore new oilfields and offshore hydrocarbon reserves in their regions. India is the third largest country when it comes to importing oil and hence it looks for fuel alternatives and hydrocarbon reserves under its land and sea. The proliferating market growth is attributed to the higher population of India and the automotive boom in the nation. The increased per capita income has fueled the sales of new vehicles, increasing the demand for affordable fuel. Considering the high-paced adoption of EVs, vehicles with internal combustion engines still hold the major market space. Hence, authorities dig deeper, exploring the oil and gas fields. From major oilfields, and coast to deepwater offshore drilling, India is set to expand its drilling infrastructure to meet the consumption.

For instance, in February 2023, India's ONGC announced that it is set to invest a total of USD 7.2 billion in the 24-field development, enhanced oil recovery (EOR), and improved oil recovery (IOR) projects. These under-development projects include both offshore and onshore exploration sites.

Sustainable Oil and Gas Extraction to Expand Market Expansion

The oil and gas exploration companies tend to focus on sustainable extraction as well. Apart from the government's drilling guidelines for offshore and onshore oil drilling, companies themselves produce innovative solutions. The technological advancements in oilfield drilling and gas extraction involve directional drilling, nitrogen services, well stimulation and intervention, hydraulic fracturing, and coiled tubing. Companies embrace these technological advances to improve production and environmental sustainability. These practices involve the integration of IoT-enabled sensors and state-of-the-art drones for real-time monitoring. Sustainable and innovative practices like these provide an edge for ensuring higher production with lower disruptions. Focus on offshore oil drilling has increased over the years with increased government investment.

For instance, in February 2024, Seros Energy Pvt. Ltd. showcased its sustainable Coal-Bed Methane (CBM) exploration, highlighting its advanced initiatives and advancements in the field. The company revised its commitment towards sustainable drilling and exploration of CBM with the help of innovative technologies like hydraulic fracturing and well stimulation.

Government Regulatory Framework and Investments to Transform Market Dynamics

Government investments and policies focusing on easing the business environment for contractors are expected to fuel market growth. From offshore oil and gas platforms to onshore pump jacks, the government monitors each stage including processing, storage, transportation, and refining. Over the years, government authorities have introduced different policies, regulating the oil and gas drilling industry. These policies comprise hydrocarbon exploration and licensing policy, open acreage licensing, and revenue sharing model. Also, the government regulates and manages the high oil-producing fields by providing opportunities to market players for different purposes like transportation, floating storage, and offloading. It provides aid to oil refiners, contractors, etc.

For instance, in January 2024, the Finance Ministry announced the possibility of reducing the oil firms' aid of USD 3.6 billion to keep the fiscal deficit at 5.9% of GDP. In 2023, Indian Oil Corp and Bharat Petroleum Corp Ltd planned to raise the capital with government backing. The fund to support investments in navigating the energy transition can be reduced by 50%.

Depleting Onshore Reserves and Higher Production to Fuel the Offshore Segment

Based on application, the offshore segment is expected to accelerate at a decent rate during the anticipated period. This is due to the large amount of hydrocarbon reserves present and unexplored under the seabed. Furthermore, the depleting onshore oilfields are limiting exploration operations while companies are focusing on building technologies to locate possible seabed that could contribute to higher energy demand.

The increased oil production, minimum chances of disaster, and government backing fuel offshore application segment. Nearly 7,517 km of coastline in India including the mainland's 6,100 km, the potential of offshore oil drilling is unmatchable.

Transocean Ltd, for example, in August 2023 won an ultra-deepwater drillship contract of USD 222 million, under the name of Transocean Deepwater Drillship Contract (TDR) awarded by ONGC. The program will start in Q1 2024, and the total duration of the contract is 21 months. Transocean has 37 MOUs (Mobile Oilfield Services Units) consisting of 28 ultra-deepwater drilling floaters and 9 harsh environment drilling floaters owned or partly owned by the company.

Future Market Scenario (FY2024 - FY2031)

Increased demand for affordable fuel, the government's focus on self-reliant energy resources, and rapid offshore drilling operations shape the market prospects.

New government aid for technological shifts and the adoption of sustainable drilling practices are anticipated to transform market dynamics.

Increased focus on offshore drilling operations is expected to create opportunities for rig builders and floaters during the forecast period.

Indian oilfield service vendors along with state-owned firms are likely to invest in the western offshore projects.

Key Players Landscape and Outlook

Key players in India oilfield services market hold a mixture of state-owned and private companies. Major brands are focusing on government tenders and private-public partnerships. Key market players upgrading their drilling technology are expected to deliver sustainable drilling options. Furthermore, competitors merge, collaborate, and acquire to enhance their supply chain and expand their service area. Companies focus on adopting the latest drilling technology to increase the production volume and limit environmental exploitation. Companies collaborate with major global companies to speed up the exploration process.

For instance, in February 2023, State-owned ONGC announced that it would be investing in offshore western assets to boost output. The firm stated its communication with global oil majors such as Equinor ASA, Chevron Corp., and Exxon Mobil Corporation.

In January 2024, Cairn Oil & Gas submitted its Field Development Plan (FDP) to produce over 2,000 boepd. The Jaya oil and gas discovery field located in the Bharuch district of Gujarat holds the potential to double production capabilities. It is the first FDP filed in OALP regime from 144 blocks awarded under 8 OALP rounds.