Market Trends of Saudi Arabia Completion Equipment And Services Industry
Onshore Expected to be a Significant Sector
- Onshore activities account for the largest market in oil field services in Saudi Arabia. During the period of downturn, the onshore rig count in the majority of oil and gas economies declined and negatively affected oil field services.
- However, Saudi Arabia continued its drilling program to maintain its position as one of the global leaders in oil production capacity. The fact that a number of oil and gas fields in Saudi Arabia have break-even prices less than USD 25 per barrel supported this. This resulted in Saudi Arabia being one of the most promising markets for well-cementing equipment and services during the study period.
- As of December 2022, there were nearly 41 rigs operating in the onshore region, and this number was expected to increase further with the Marjan oil field expansion and the Berri field expansion projects. The projects are scheduled to be commissioned in 2023.
- Further, a new wave in demand for oil field services in the country is expected to come from the development of its onshore shale reserve. The country approved drilling for shale gas in the Jafurah basin in January 2020. A rough estimate for the shale gas in Jafurah is 600 trillion cubic feet, which is expected to start production in 2024.
- Production of natural gas at Jafurah is expected to ramp up from 200 million standard cubic feet per day in 2025 to reach a sustainable rate of two billion standard cubic feet per day of sales gas by 2030, with 418 million standard cubic feet per day of ethane and around 630,000 barrels per day of gas liquids and condensates, which are essential feedstock for the growing petrochemical industry, thus making Saudi Arabia one of the world's largest natural gas producers.
- In February 2022, Schlumberger Limited opened its second local valve manufacturing facility in Saudi Arabia. The manufacturing center is expected to manufacture Cameron isolation valve technologies, including Grove valves and Orbit rising stem ball valves, to enhance the efficiency of oil and gas operations in the region.
- Hence, with such projects in hand, the sector is likely to act as a significant sector during the forecast period.
Understand The Key Trends Shaping This Market
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Increasing Development Work on the Oil & Gas Offshore Sector is Expected to Drive the Market
- Saudi Arabia is the second-largest oil producer in the world and is expected to maintain the rank with state-owned oil and gas company Saudi Aramco's commitment to boost production to around 12.55 million barrels per day by 2025 from its existing 10.95 million barrels per day in 2021.
- In March 2022, the state oil company Saudi Aramco announced it would boost its capital expenditure to USD 40 to 50 billion, which further bolstered the country's exploration and production activities.
- As of December 2022, Saudi Aramco was in initial talks with potential equity investors for its planned USD 110 billion Jafurah gas project in the Eastern Province of Saudi Arabia.
- In February 2023, Saudi Aramco announced that the company expects to award contracts for some 90 projects over the next three years as it presses ahead with major expansions of its upstream oil and gas production capacity.
- Hence, such a scenario is expected to provide favorable conditions for the market to drive during the study period.
