Impact of COVID-19 on the Global Wired Drill Pipe Market
The spread of COVID-19 has affected businesses across various sectors significantly. Energy and utility being some of the highly impacted sectors, the enterprises in these sectors are focused on safeguarding their assets and providing a safe, reliable supply of natural gas and electricity to their consumers.
A wired drill pipe is a multifunctional tool that can transmit real-time wellbore data at a bandwidth of 57,000 bits/second in a seismic or sonic waveform. The tool is also capable of regulating the downhole tools, which offers an added advantage. The wired drill pipe system helps in controlling the rotary steerable systems, and the Logging While Drilling (LWD) formation testers and geosteering sensors which allow prompt control and approval of commands, permitting exceptionally precise control of the system thereby, driving the demand for wired drill pipes to maximize operational efficiency and production capabilities. With the economic downturn which followed the spread of COVID-19, the market has witnessed a decline in the demand, which is expected to have a short-term impact on the wired drill pipes market.
Source: Primary Experts, Secondary Sources, and MRFR Analysis
Number of Oil and Gas Wells Drilled in the US
Source: Secondary Sources
Amidst the pandemic, the deployment of rigs has reduced rapidly due to which the drilling and production activities are slowing down, affecting the wired drill pipes market. North America’s oil & gas drilling activity accounts for about 40% of the world’s current drilling activity, which was creating a huge demand for modern drilling techniques before the outbreak of the COVID-19 pandemic. On the other side, due to the spread of COVID-19, the region has faced a significant economic downturn, lowering the demand for wired drilling pipes during 2020. The US Rig Count shows the impact of the COVID-19 lockdowns imposed during March 2020, wherein 683 rigs were operational before the lockdowns were imposed as compared to the 664 rigs operational post the imposition of the lockdowns. Other factors, such as falling oil prices, office closures, and travel restrictions, have also had an indirect impact on the market. Moreover, the disruptions in the supply chain and impact on the electronics industry have also had an impact on the wired drill pipes market. According to the MRFR analysis, the recession in 2020 is expected to hamper demand, and the enterprises are focused on reducing the spending on high-cost equipment. However, the market is expected to gain traction in early 2021 and grow remarkably during the forecast period.