Market Trends of Oilfield Equipment Industry
Onshore Segment to Dominate the Market
- Onshore drilling encompasses all the drilling sites located on dry land and accounts for 70% of worldwide oil production. Onshore drilling is similar to offshore drilling but without the difficulty of deep water between the platform and oil.
- The global crude oil prices showed signs of recovery and are improving quickly, and the onshore projects are easier to kick start than offshore ones. Therefore, riding on the optimism associated with the recovery of crude oil prices, onshore projects are expected to record significant growth over the forecast period, driving the demand for the oilfield equipment market.
- According to Baker Hughes, as of October 2023, the total onshore rig counts accounted for 736 units, approximately 75% of the total rig counts. With the increasing rig counts on the land region, drilling, production, and other oil field activity are expected to be in demand. It, in turn, will drive the oilfield equipment market for the onshore region.
- According to Schlumberger (SLB), a provider of oilfield services, the company would increase its quarterly dividend in 2023 by 43% (to 25 cents per share) and resume its share buyback program in reaction to the strong energy markets. In 2021, the company recorded total revenue of USD 586 million, out of which the onshore segment recorded revenue of USD 439 million, representing 75% of the total revenues. The offshore segment reported USD 147 million, representing 25% of the total revenue.
- Moreover, oil Production increased by 1.6% in 2021 worldwide. In 2021, the oil production was 89877 thousand barrels per day compared to 2020, which was 88494 thousand barrels per day.
- Hence, the onshore segment is expected to dominate the oilfield equipment market worldwide.
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North America is expected to Dominate the Market
- North America is expected to dominate the oilfield equipment market in 2023. It is expected to continue its dominance during the forecast period.
- The share of North America in global crude oil production increased from 17.3% in 2013 to around 22.7% in 2021, which resulted in an increased demand for oilfield equipment in the region.
- Further, Canada's oil and gas industry is expected to attract rising investment interests in the future due to an aggressive push by Newfoundland and Labrador as prices plummet in oil-rich Alberta.
- In May 2022, the Canadian Association of Energy Contractors raised its drilling prediction for oil and natural gas after a good first quarter due to higher-than-expected oil and gas prices. The revised drilling projection predicts 62,121 working days for the year, up from the earlier forecast of 58,111, and 170 active rigs, up from 159.
- Furthermore, due to higher oil prices and declining drilling costs, the offshore rig count and offshore oil production in the United States increased significantly, indicating that growth is not only offshore drilling but also production activity. It, in turn, is expected to be the major driver for the oilfield equipment market in the country.
- Therefore, factors such as rising oil and gas activities are expected to grow the oilfield equipment market in the forecast period.
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