From a volume of 2,597 hundred units in 2012, the global market for drill bits for the oil and gas industry will display a volume growth at a CAGR of 4.9% from 2013 to 2019, says Transparency Market Research. With consistent developments in the material, design, and technology employed for drill bits, this market will experience steadfast growth in the coming years. The increasing oil and gas exploration activities in certain parts of the world, which include offshore drilling, shale, etc., are exhibiting a substantial demand for drill bits.
How do Drill Bits Work?
In oil and gas drilling activities, it is the drill bit that actually cuts into the rock that contains the high-value substance. Fabricated of tough materials such as tungsten carbide, steel, and/or natural diamonds, a drill bit is a rotating apparatus that contains two or three cones and sharp teeth that pierce through the rock and sediment underneath it in reservoir wells. In a drill string column, the drill bit is located at the tip, which receives drilling fluid and torque through intermediate components in the assembly.
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Drill bits are mainly of two types – fixed cutter bits and roller cone bits. Composition-wise, rolling cone bits either have tungsten carbide or milled-tooth bit inserts. Fixed cutter bits are composed either of natural diamond or polycrystalline diamond cutters (PDC). Between the two, roller cone bits led the drill bits market in terms of volume in 2012. Nevertheless, the high efficiency and durability of fixed cutter bits helps efficiently recover trapped oil in rock formations. In particular, PDC cutters significantly enhance drilling operation and the rate of penetration in abrasive materials.
However, technologically advanced drill bits have a high cost factor attached to them. Hence, these products are often beyond the capacity of small-scale miners, which has implications on the total operation cost for small-time companies. Regardless, the use of drill bits is influenced by the actual cost and benefit ratio of these tools. As a common practice, drilling activities that are at depths of 3000 meters and above or for hard/abrasive surfaces employ PDC drill bits. For these operations, the advantage of PDC lies in reducing drilling time and in minimizing incessant breaks for the repair/replacement of these tools.
U.S. Shale Revolution Boosts Global Drill Bits Market
Currently, North America is the largest market for drill bits and will continue to remain so in the future as well. In the U.S., the recent gas security gains by means of oil and natural gas production are reducing dependence on imports. In particular, it is the shale revolution that has stimulated the large-volume production of oil and natural gas in the country. The revolution is the outcome of advances in oil and natural gas production technology, especially those related to a combination of hydraulic fracturing and horizontal drilling techniques.
Moreover, in the U.S., the oil rigs count is rising continuously, which reflects positively upon the increasing oil drilling activities in the country. This explains North America’s 35.7% volume share of the global market for drill bits in 2012.
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