The Europe completion equipment and services market is expected to grow at a CAGR of more than 0.5% over the period of 2020 - 2025. Factors such as increasing production of conventional and unconventional resources and reduction in the maintenance cost of wells are expected to drive the market. However, sanctions on Russia from the European Union and the United States cause difficulties in the maintenance of joint ventures between the companies, thereby reducing knowledge and expertise sharing, which may restrain the market's growth.
- Crude oil and natural gas production are expected to continue to be a vital part of meeting Europe's demand, and the onshore segment is expected to be the largest segment in the forecast period. Increasing advancements in technologies are expected to aid the growth of the sector.
- New development in the intelligent well completion technology, like the advancements in the high-end self-adaptive inflow control completion technology, is expected to make the oil and gas production more viable and may provide an opportunity for market players.
- Russia is expected to be the largest market in the forecast period due to its abundant oil and gas production, advancements in the technology, and increasing investment in the completion equipment and services market and is expected to facilitate further growth.
Key Market Trends
Onshore Segment to Dominate the Market
- In the onshore segment, well completion equipment and services have proven their value in managing production from multilateral wells, horizontal wells with multiple zones, wells in heterogeneous reservoirs, in unconventional reservoirs and mature reservoirs. Further advancements in the technologies are expected to aid the growth of the market.
- Well construction in shale plays requires long laterals. This need has pushed the development of better cementation mechanisms. The new method of dynamic cementation, where pipe movement is maintained until cement begins to set, maximizes the mud-cement displacement process. It can achieve high-quality completion using a combination of modern cementing software and real-time rig instrumentation. Although shale is in dormant stages in the region, increasing advancements in the technological field may make the market more viable and aid the growth in the forecast period.
- In 2019, Tendeka secured the sand and inflow control contract for Equinor's Troll field on the Norwegian Continental Shelf. The four-year exclusive contract will see the company deliver and install up to 100,000 meters of sand screens and FloSure Autonomous Inflow Control Device (AICD) for sand-face completion annually. Sand packing provides for an increase in the production of oil and reduction in the production of water and other impurities, thereby increasing the efficiency of the extraction of crude oil. An increase in investments in the sector is expected to aid the growth of the market.
- The onshore rig count in the region is estimated by Baker Hughes Company to be around 85 units in May 2020. An increase in exploration and production, like the discovery of natural gas in the East Mediterranean Sea, may aid the growth of the market.
- Hence, the onshore segment is expected to be the largest segment in the forecast period due to an increase in investments and advancement in technology.
Russia to Dominate the Market
- Russia was the largest producer of crude oil and natural gas in the region, in 2019. It is also among the largest user of well completion techniques, which, among others, are used primarily in the economically viable recovery of conventional sources of hydrocarbons in the country. Private and governmental companies are looking for different techniques for their conventional reservoirs to efficiently extract oil and gas using the well-completion equipment and services market.
- As the sanctions on the country, domestic oil producers like PJSC Rosneft are pursuing import substitution strategies in the well completion equipment market through in-house research and development centers. However, the development of commercially feasible technologies and fully localized production of the required equipment is expected to take time to develop. Expertise related to the market may also require sufficient investments and time to match the required standards.
- Crude oil production in the country has increased by 0.8%, to 568.1 million tonnes, in 2019 from 563.3 million tonnes in 2018. The output may increase further in the forecast period and boost the Russia completion equipment and services market.
- In February 2020, PJSC Rosneft intends to develop vast oil reserves on the northern Ural region's wide-stretching tundra lands and export them to the investing countries such as India. The project will require over USD 150 billion in investments and is expected to provide a large market for well completion equipment and services in the forecast period.
- New Industry Ventures, a Russian fund, has injected USD 1.6 million, in ADL Completions, a startup, to develop technological solutions in multilateral and multi-bore well completion. These solutions allow side-tracks to be built onto existing wells, maintaining the flowrate into the central well. A prototype system is in place, and the company is ready for batch production. Advancements in technology are expected to aid the growth of the market.
- Hence, Russia is expected to dominate the market in the forecast period due to an increase in production, advancements in technologies, and high efficiency in aiding oil and gas production.
The Europe completion equipment and services market is moderately fragmented. Some of the key players in this market are Schlumberger Ltd, Halliburton Company, Baker Hughes Company, Weatherford International plc, and Trican Well Service Ltd.
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