With the COVID-19 outbreak, several oil and gas projects had been suspended or delayed due to travel bans, supply chain disruptions, and low crude oil prices. In April 2020 crude oil price collapsed due to low cruder oil demand due to several restrictions imposed due to COVID-19. Low crude oil price reduces the operator’s profit margin, thus having a negative impact on the upstream activities and the market studied. Major factors driving the market include increasing exploration and development activities, increasing unconventional field development activities, and increasing directional drilling. On the other hand, the volatile nature of crude oil prices and the efforts of the major countries to shift from fossil fuel-based energy mix to renewables is expected to hinder the growth of the market studied.

The fixed cutter bit segment is expected to dominate the market during the forecast period owing to its advantages compared to roller cone bit and it is also considered as the best drill bit for shale formations.

Exploring new markets in emerging economies of South America and Asia-Pacific and innovations in the drill bit technological landscape are expected to present several opportunities to the drill bit manufacturers in the near future.

North America has dominated the drill bit market in 2019 and is expected to continue its dominance during the forecast period. With the large-scale implementation of hydraulic fracturing technology and the shale revolution, the United States, which has been a net importer of energy since 1953, is well on track to become a net energy exporter by 2022. As the demand for drill bits is directly affected by oil and gas activities, increased oil and gas drilling activity has resulted in higher demand for drill bits in the country.

Key Market Trends

Fixed Cutter Bits to Dominate the Market


Fixed cutter bits have no moving parts or bearings, unlike roller cone bits. The cutters are permanently mounted onto blades, which are integral to the structure of the bit. Polycrystalline Diamond Compact (PDC) bits dominate this category and hold a much higher market share than Roller Cone Bits in the current drill bit market.

Since the invention of the polycrystalline diamond compact (PDC) by General Electric in 1971, this technology has impacted nearly all material removal industries. After its introduction into the drilling industry at Hughes Tool Co. (HTC) by GE Carboloy in late 1972, the PDC cutter and bit technology have progressed slowly for several years.

Another contributor to the massive success of the PDC drill bit was the development of computer models, which helped to design and understand the behavior of PDC bits. Since 2000, PDC bits have rapidly expanded in oil and gas applications. Formations considered un-drillable a few years earlier are being drilled economically and reliably.

The PDC bits can penetrate formations with hard interbedded streaks. As PDC is considered to be the best suit for shale drilling, the ongoing rapid developments in shale business have aided the growth of the PDC drill bit market in the past 20 years. PDC bits are now being used in s majority of North American land drilling applications.

The fixed cutter bits segment is estimated to experience a high demand growth rate and is expected to continue dominating the drill bit market during the forecast period.

North America to Dominate the Market


North America comprises developed economies with substantial oil & gas resources. The United States is one of the largest producers of crude oil and natural gas, which accounted for around 18% and 23% of global oil and gas production respectively in 2019. The production surged after 2017, mainly due to robust drilling in its shale reserves, led by the Permian Basin.

As the demand for drill bits is directly related to the upstream oil & gas activities, increased oil & gas exploration and production has resulted in higher demand for drill bits in the United States.

The unique extended-reach horizontal shale drilling application has created a new set of specific challenges. The drilling challenges in shale formations are now very easily being mitigated by the use of PDC drill bits. Drillers in the region are working in tandem with drill bit manufacturers to optimize the drill bit usage.

Furthermore, in Canada, investment in new oil & gas projects is expected to increase during 2021. Nearly CAD 27.3 billion is expected to get invested in oil and gas upstream operations, which is likely to support the market growth during the forecast period.

However, with the change in government in December 2020, the United States government plans to halt all upstream oil and gas activities in the federal land and water. The plan, if executed is expected to significantly impact the drill bit market in the near future.

Competitive Landscape

The global drill bit market is moderately consolidated. Some of the major players in the market include Schlumberger Limited, Baker Hughes Company, National-Oilwell Varco Inc, Weatherford International Plc, and Halliburton Company.

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