Procurement Market Intelligence Report
Directional Drilling Services
Sourcing Guide & Market Intelligence
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Directional Drilling Services Global Overview
Definition
Summary
Directional drilling involves drilling at an angle to take measurements, hit targets and stimulate reservoirs. This method of drilling allows extractors to obtain resources from multiple adjacent reservoirs. These evaluation services aid in reservoir engineering, well placement and mining resource mapping. Directional drilling services benefit buyers because they reach targets that cannot be reached otherwise while improving well productivity in a fractured reservoir and minimizing the well's environmental impact. Buyers typically include oil and gas well operators, and these services can be purchased from full-scale multiline oilfield service providers or drilling specialists.
This Report Includes:
- Oil & Gas Well Drilling
- Public Utilities Drilling
- Water Well Drilling
Not in this Report:
- Horizontal Drilling
- Hydraulic Fracturing
- Oil Well Fishing Services
- Underbalanced Drilling
Global Directional Drilling Services Procurement Trends
Discover the top international trends affecting procurement in the global Directional Drilling Services market.
Warning Trends
United States announces new tariffs on all imported steel
- In February 2025, the United States announced 25.0% tariffs on all imported steel with no exemptions or exceptions. The tariffs took effect on March 12, 2025. On June 4th, these tariffs were increased further to 50%. These tariffs were not impacted by a recent court decision that temporarily suspended duties on certain goods as they were implemented under Section 232 of the Trade Expansion Act.
- Previously, countries such as Canada, Mexico, and Brazil, the top exporters of steel to the United States, had exemptions from tariffs. These have now been removed and all imported steel, regardless of origin, will be subject to the 50.0% tariff. However, on May 8th, the US announced an agreement with the United Kingdom to remove all levies on steel exported from the UK.
- When tariffs on steel imports were introduced in March 2018, they contributed to an increase in the price of steel and steel products. According to the Bureau of Labor Statistics, the price of steel-milled products increased by 10.2% in the year after the tariffs were implemented. This market heavily relies on steel as an input and may be impacted by this policy.
Neutral
Crude oil prices dip, but natural gas and fuel prices remain volatile in 2025
- Oil prices have been falling with the introduction of higher tariffs and the predicted decline in global demand. The OPEC+ group of countries also announced they would be unwinding production cuts and increasing their collective output target for May by 411,000 barrels per day.
- Trade wars, ongoing conflict between Hamas and Israel, and general unrest in the Middle East are causing uncertainty surrounding oil prices, which has led to volatility in prices. In the third week of May 2025, crude oil prices hit $63.67 per barrel, but volatility remains as geopolitical concerns remain.
- Natural gas prices rallied early in 2025 with colder-than-usual temperatures in the United States and high demand, topping out at $4.68/MMBtu in March. Prices have since fallen with the onset of trade wars and weakening demand projections to $3.64/MMBtu in the third week of May 2025.
- The national average of gasoline prices has been rising slightly due to refinery maintenance/outages and blending issues, hitting a national average of $3.15 per gallon in the third week of May 2025. However, gasoline futures have been volatile, falling due to fears of oversupply and deepening concerns about weakening demand with tariffs, but rising after trade deals.
Global Directional Drilling Services Market - Suppliers by Region
| Country/Region | Number of Suppliers |
|---|---|
| #1 South America | 7,480 |
| #2 Africa & Middle East | 6,610 |
| #3 Europe | 4,270 |
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2
Geography Drilldown - US
Average Cost of Directional Drilling Services
United States
2026 Market Pricing$5.00 to $X,XXX.XX
per footAverage Price
Prices in the Directional Drilling Services market range from $5.00 to $X,XXX.XX, depending on Location, Type of project and Geological Properties. For example, lower prices are associated with Rural drilling site ($5.00 to $300 per foot) and Onshore drilling site ($5.00 to $500 per foot), whereas higher prices are associated with Urban drilling site ($25.00 to $500 per foot) and Offshore drilling site ($100 to $1,000 per foot).
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Directional Drilling Services Category Price Trends
Pricing trends are indicated by the compound annual growth rate (CAGR) during a set period of time. For the Directional Drilling Services market, prices in the US have grown 1.0% from 2022 to 2025. Subscribers can access price trend forecasts, price driver projections and forward-looking cost structure data. Learn more
United States (2022-2025)
United States (2025-2028)
Compound Annual Growth Rate
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Price trend forecasts are available to subscribers, along with price driver projections and forward-looking cost structure data.
Cost Analysis - Total Cost of Ownership for Directional Drilling Services
Total cost of ownership is Medium in the Directional Drilling Services market. The average cost of ownership differs depending on the contract but generally includes costs negotiated before the contract begins, costs billed during the contract period and unforeseen costs. For example, unforeseen costs in the form of Emergencies may raise the total cost of ownership unexpectedly.
Negotiated Before
Pre-evaluation
Other Fees
Transportation
Billed During
Disposal
Unforeseen
Emergencies
Buyer Power in Procurement Negotiations
In 2026, buyer power amounts to -1.5 in the United States. Buyer power is most positively impacted by Recent Developments. It is most negatively impacted by Market Share Concentration. Subscribers can access details on eight other factors that impact buyer power. Learn more
United States
Buyer power forecasts: your glimpse into the future
Develop strategies for the upcoming year and identify unforeseen opportunities for buying now
- Actionable "Buy Now" and "Buy Later" insights
- Near-real-time updates to current and forecast Buyer Power Scores
- Methodology and weightings for Buyer Power Score Components
Supply Chain Risk
The average level of supply chain risk is assessed as Medium, which has a negative impact on buyer power. The level of supply chain risk is affected by industry volatility, barriers to entry, competition, import penetration, regulation and industry financial risk. Buyers in this market can mitigate procurement and supply chain management risks by monitoring risk levels for individual first and second tier suppliers:
1st
Tier Suppliers
- Electrical Equipment Wholesalers
- Drilling Fluid & Chemical Wholesalers
- Drilling & Mining Equipment Wholesalers
2nd
Tier Suppliers
- Electrical Equipment Manufacturers
- Inorganic Chemical Manufacturers
- Heavy Machinery Manufacturers
Biggest Directional Drilling Services Suppliers in the US by Revenue
The largest Directional Drilling Services vendors by revenue in the US are Archer Limited, Precision Drilling Corp and Baker Hughes Company. Subscribers can sort and filter by market share concentration, profit level and other factors. Learn more
| Supplier | Operational Size | Headquarters | Number of Employees | Market Share (%) | Market Share Performance (3yr trend) | Total Revenue ($ million) | Profit Level (%) | Risk Level |
|---|---|---|---|---|---|---|---|---|
| Schlumberger Limited | Global | HOUSTON, TX | >10,000 | 5-10 | ||||
| Halliburton Company | Global | HOUSTON | >10,000 | 5-10 | ||||
| Baker Hughes Company | Global | HOUSTON, TX | >10,000 | 5-10 | ||||
| Weatherford International Plc | Global | HOUSTON | >10,000 | 5-10 | ||||
| Aecon Group Inc. | Global | Toronto, CA | >10,001 | < 5 | ||||
| Nabors Industries ltd | Global | HAMILTON, HM08 | >10,000 | < 5 | ||||
| Precision Drilling Corp | Global | Calgary, CA | 1,001-10,000 | < 5 | ||||
| Archer Limited | Global | Sandnes, NO | 1,001-10,000 | < 5 | ||||
| Michels Corporation | National | Brownsville, WI | 1,001-10,000 | < 5 | ||||
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Profit Analysis
The average profit margin across vendors in the Directional Drilling Services market is 19.4% and steady. Profit levels shift depending on suppliers' spend on wages, purchases and overhead. The highest cost component for vendors is Overhead. The cost trend for this component is stagnating, when considering movement between 2025 and 2026. To understand cost forecasts for 2027 and uncover the implications on profit, start your subscription. Learn more
Vendor & Supply Chain Analysis
Low market share concentration in the market indicates that there are no clear leaders controlling revenue or influencing market rates. As such, vendors operate competitively, offering buyers opportunities for negotiation.
On average, vendor is is low indicating that buyers do no face significant risk of experiencing service disruptions due to complications among vendors, such as financial instability.
Supply chain risk in the market is moderate, as some critical inputs used during drilling operations can fluctuate in price and availability frequently, such as drill bits. This imposes a moderate risk to buyers that they may face price shifts or delays due to upstream supply issues for key inputs.
The United States is a net importer of metal boring machines, indicating that buyers may have greater access to competitive goods that may have lower prices or unique features. However, depending on foreign suppliers may leave buyers open to supply chain disruptions of foreign currency exchange issues.
Supplier Information
Baker Hughes Company
Baker Hughes Company is a public company operating globally in the mining, manufacturing, manufacturing and professional, scientific and technical services sectors. The company's offerings include inflow control devices, coiled tubing monitoring systems, drilling fluids, hydraulic power tongs, oilfield separators.... Subscribe to learn more
Halliburton Company
Halliburton Company is a products and services provider to the energy industry. It organizes its business into two operating segments: Completion and Production segment, which delivers cementing, stimulation, specialty chemicals, intervention, pressure control, artificial lift, and completion products and... Subscribe to learn more
Schlumberger Limited
Schlumberger Limited is a public company operating globally in the mining, manufacturing, manufacturing, professional, scientific and technical services and other services (except public administration) sectors. The company's offerings include inflow control devices, drilling tools, drill bits, downhole instrumentation,... Subscribe to learn more
Weatherford International Plc
Weatherford International Plc is a public company operating globally in the mining, manufacturing and professional, scientific and technical services sectors. The company's offerings include inflow control devices, drilling tools, drill bits, downhole instrumentation, coiled tubing monitoring systems. Founded... Subscribe to learn more
Aecon Group Inc.
Aecon Group Inc. is a public company operating globally in the mining sector. The company's offerings include directional drilling services. Founded in 1900, the company is currently headquartered in Toronto, Canada with an estimated employee count of over 10,000. Subscribe to learn more
Archer Limited
Archer Limited is a public company operating globally in the mining and manufacturing sectors. The company's offerings include drilling rigs, coiled tubing services, directional drilling services, wireline & perforating services, slickline services. Founded in 2007, the company is currently headquartered Subscribe to learn more
Michels Corporation
Michels Corporation is a private company operating nationally in the mining and construction sectors. The company's offerings include directional drilling services, oil & gas pipeline construction, transmission tower construction and oil & gas pipe coating services. Founded in 1959, the company is currently... Subscribe to learn more
Nabors Industries ltd
Nabors Industries Ltd. is a global provider of drilling and drilling-related services for land-based and offshore oil and natural gas wells. It organizes its business into four segments: the U.S. Drilling segment, which operates land-based drilling rig fleets in the US, focusing on the major hydrocarbon basins... Subscribe to learn more
Precision Drilling Corp
Precision Drilling Corp is a public company operating globally in the mining sector. The company's offerings include directional drilling services. Founded in 1951, the company is currently headquartered in Calgary, Canada with an estimated 5500 employees. Subscribe to learn more
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Procurement Management KPIs for the Directional Drilling Services Market
Managing vendor performance throughout the contract period is easier when tracking specific key performance indicators (KPIs). For example, buyers should monitor Employee Absence Rate and On-Time Completion %. Buyers may experience better performance throughout their contracts if they establish service level agreements (SLAs) based on Reporting and other factors.
| KPI | Level of Importance (1-5) | Measurements | Key Considerations |
|---|---|---|---|
| Employee Absence Rate |
|
Number of days off by drilling operators Unexpected absences by drilling operators |
Vendors should ensure that their employees are dependable and reliable and show up to the drill site on time. Frequent absences by employees will reduce the overall efficiency of the operation and lead to delays. |
| On-Time Completion % |
|
Major milestone dates hit on-time Feet drilled per day |
On-time completion of the drilling operation is critical for buyers as the sooner the well is completed, the sooner buyers can generate profit from the reservoir. Barring complications stemming from outside forces, such as weather, vendors should maintain a high level of efficiency and productivity to ensure the deadline is met. |
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Questions to Ask During Procurement Negotiations
How can I gain leverage during negotiations?
Experience and Expertise
What similar projects have you worked in the past? What challenges did you face and how did you overcome them?
What experience do you have working with different soil conditions?
Quality Control
How do you ensure the accuracy of your drilling?
What equipment, tools or software do you use to minimize errors and your environmental impact?
Cost Containment
Have you ever had challenges with costs beyond what was budgeted in your contract? What changes have you made as a result of those experiences?
Who is in charge of maintaining the budget on projects? Is it someone on the key team, or an outside eye?
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Directional Drilling Services RFP Guidelines
What should my RFP include?
Organizational Overview
Buyers should describe their organization(s) and the scope of their operations.
Buyers should provide details regarding the location at which the services will take place.
Statement Of Need
Buyers should state the specifics of their operations, including the number of wells currently existing, the number of wells that require drilling and any other relevant information.
Buyers should provide information regarding the geological makeup of the region in which the wells will be drilled.
Project Budget
Buyers should state their total budget for the project described in the RFP.
Buyers should state their payment expectations, stating the method through which they will be paying for these services as well as the frequency of payments.
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Our Reports include:
- Opportunity assessment
- Market dynamics
- Recent developments
- Positive and warning trends
- Buyer power levers
- Price environment and market pricing
- Geographic wage rates
- Global market updates
- Total cost of ownership
- Cost structure benchmarks and analysis
- Supply chain and vendors
- Global supplier breakdown
- Market share concentration
- Regulation and business requirements
- Vendor management and KPIs
- Sourcing strategy guidance
