Africa Drilling Fluids Market Size, Share, Opportunities, And Trends By Fluid Type (Water-Based, Oil-Based, Synthetic-Based), By Application (On-Shore Drilling, Off-Shore Drilling), By End-User (Oil & Gas, Mining), And By Country - Forecasts From 2023 To 2028

The African drilling fluids market was valued at US$251.640 million in 2021 and is projected to expand at a CAGR of 4.47% over the forecast period to reach US$341.835 million by 2028.

Drilling fluids play a crucial role in the drilling industry by ensuring borehole stability, preventing formation damage, and maintaining a consistent pH level in the drilling mud. Their high tolerance for elevated temperatures makes them particularly suitable for drilling operations in environments with high temperatures. The Africa region is witnessing a surge in productivity in the mining and oil & gas sector. This growth is anticipated to significantly contribute to the increasing demand for drilling fluids in the market, thereby fostering regional market expansion. The effectiveness of drilling fluids in addressing various challenges encountered during drilling processes positions them as essential components for the success and efficiency of operations in these sectors.

In the coming years, the growth of the drilling fluids market in Africa is anticipated to be propelled by a rise in the frequency of drilling operations across various African countries. Additionally, the exploration and development activities in challenging terrains such as shale, deep-water, and ultra-deepwater fields are expected to be significant contributors to the market's expansion. Conversely, the market may face challenges due to the volatility in oil prices observed in recent periods. This volatility is attributed to factors such as disparities in supply and demand, geopolitical tensions, and various other elements. The unpredictable nature of oil prices is likely to impede the growth trajectory of Africa's drilling fluids market throughout the forecast period. Despite the potential setbacks, the long-term prospects remain influenced by ongoing developments and advancements in the drilling industry, with opportunities arising from increased exploration activities and advancements in drilling technologies.

Rising oil and gas production

The surging global demand for oil and gas has led to heightened exploration and production endeavours in the Middle East and Africa region. The widespread application of drilling fluids in oil and gas exploration and production is attributed to their exceptional performance in safeguarding against formation damage and ensuring borehole stability during drilling operations. The anticipated growth in both on-shore and off-shore oil extraction activities in Africa is expected to drive an increased need for these fluids.

According to the International Energy Agency Outlook report in 2022, in the fourth quarter of 2022, global oil demand decreased by 110 thousand barrels per day (kb/d) year-on-year, reaching 100.8 million barrels per day (mb/d). This represented a 130 kb/d increase compared to the previous month's report, primarily due to robust gasoil consumption in key consumer nations, which offset sluggish petrochemical deliveries in Europe and Asia. The forecast for oil demand growth had been revised upward to 2.3 mb/d (an increase of 140 kb/d) for the entirety of 2022 and 1.7 mb/d (an increase of 100 kb/d) for the following year, reaching 101.6 mb/d.

While the production of oil and gas continues to be crucial for Africa's economic and social development, there is a shift in focus towards meeting domestic demand. The global push for a clean energy transition in Sub-Saharan Africa (SAS) poses a potential risk of reducing export revenues for Africa's oil and gas sector. Over the period from now until 2030, approximately two-thirds of Africa's oil and gas production will be directed towards meeting domestic demand. This underscores the importance of investing in effective infrastructure within Africa, including storage and distribution facilities, to fulfill the internal need for transport fuels and liquefied petroleum gas (LPG). Concurrently, African nations are concentrating on enhancing energy efficiency policies and expanding the adoption of renewables and other clean energy technologies.

Despite the discovery of over 5,000 billion cubic meters (bcm) of natural gas resources in Africa, which are yet to be approved for development, these resources could potentially contribute an additional 90 bcm of gas annually by 2030. This additional supply could prove crucial for industries such as fertilizers, steel, cement, and water desalination. The cumulative CO2 emissions from utilizing these gas resources over the next three decades are estimated to be approximately 10 gigatonnes. If these emissions were combined with Africa's current cumulative total, it would only represent a modest 3.5% of the global emissions share.

The Nigeria drilling fluids market is anticipated to expand steadily. 

The Nigeria drilling fluids market is anticipated to expand at a CAGR of XX% thereby reaching a market size of US$XX million in 2028 from an initial value of US$XX million in 2021. Drilling fluids are a mixture of clay and chemicals with oil or water that are applied on a drill bit via a pipe to lubricate and cool the machine thereby maintaining wellborn stability, well-pressure, and removing cuttings from wellborne. Such fluids minimize the wear & tar risk of drilling equipment owing to which they form an integral part of mining and on-shore & off-shore drilling operations. Nigeria is one of Africa’s major crude oil producers which is investing in its oil production capacities to meet the growing oil demand. For instance, according to the US Energy Information Administration, in September 2023, projected crude oil production in Nigeria stood at 1.31 million barrels per day which represented a signified 31% increase over 2022’s production scale of 1 million barrels per day for the same month. 

Additionally, the country is witnessing the establishment of various oil & gas exploration projects which is anticipated to provide a positive market outlook. For instance, in November 2022, the Nigerian President inaugurated the country’s first oil & gas exploration project in the Northeast in the cities of Gombe and Bauchi. 

 Besides, oil & gas exploration Nigeria is also witnessing a boom in its mining production which is further driving the market demand for drilling fluids. According to the National Bureau of Statistics, in 2022, coal mining produced NGN 22,199.63 million which represented a 35.9% increase over 2021’s production value. Furthermore, as per the same source, metal ore mining experienced 34.7% growth in 2022. 

Well-established presence of major oil & gas companies such as Shell PLC that are investing in new exploration projects in Nigeria coupled with the presence of drilling fluids market players such as Hamilton Technologies Ltd. which offers an extensive portfolio for various drilling operations are acting as an additional driving factors.

Segmentation:

• By Fluid Type
  • Water-Based
  • Oil-Based
  • Synthetic-Based
• By Application
  • On-Shore Drilling
  • Off-Shore Drilling
• By End-User
  • Oil & Gas
  • Mining
• By Country
  • Nigeria
  • Egypt
  • Algeria
  • Tunisia
  • Others