The Middle-East completion equipment and services market is expected to grow at a CAGR of more than 1% over the period of 2020 - 2025. Factors such as increasing production from conventional and unconventional resources and reducing maintenance costs of the well are expected to drive the market. However, volatility in crude oil and natural gas prices, leading to a decrease in exploration and production activities, may restrain the growth of the market.
- Crude oil and natural gas production are expected to continue to be a vital part of meeting global energy demand. The offshore segment is expected to be a significant sector in the forecast period.
- 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.
- Saudi Arabia is expected to be the largest market in the forecast period due to its abundant oil and gas production and increasing investment in the completion equipment and services market.
Key Market Trends
Offshore to be a Significant Segment in the Market
- In the offshore segment, the well intervention is expensive and high-risk, well completions equipment and services have proven their value in managing production from multilateral wells, horizontal wells with multiple zones, wells in heterogeneous reservoirs, and mature reservoirs.
- In 2018, Qatar Petroleum (QP) had contracted eight jack-ups for development drilling and well completion at the offshore North Field expansion project. Qatar Petroleum plans for the project include drilling and well completion of 80 wells from eight wellhead platforms. The new program is designed to provide new feedstock for Qatar LNG, increasing the feedstock's capacity from the present 77 million tons per year to 110 million tons per year by 2021. Further investments in the market are expected in the forecast period, providing growth to the market.
- The improvements in the completion equipment have incorporated new paradigms in the sector like intelligent or smart well completion. Intelligent completions include permanent downhole sensors that transmit data to surface for local or remote monitoring in a digital well platform. All these data may or may not be automated but deliver to increase the production of the well. These systems are being used in the offshore segment as a method to decrease the production of water from the wells.
- The offshore rig count in the middle-east region is estimated by Baker Hughes Company to be around 44 units, and this may increase in the forecast period due to investments being made in the region. In 2019, Kuwait signed a USD 600 million offshore exploration contract with Halliburton to drill six high-pressure high-temperature exploration wells in the next two to three years. Investments in the sector are expected to aid the growth of the market.
- Hence, the offshore segment is expected to be the fastest-growing segment in the forecast period due to an increase in investments and advancement in technology.
Saudi Arabia to Dominate the Market
- Saudi Arabia possesses around 18% of the world's proven petroleum reserves. The country is among the largest of users of well completion equipment and services and is expected to dominate in the forecast period.
- In 2019, Saudi Aramco awarded 34 contracts with a total value of USD 18 billion for the engineering, procurement, and construction of the Marjan and Berri increment programs. The company plans to boost the Marjan and Berri fields' production capacity to 550,000 barrels per day of crude oil and 2.5 billion standard cubic feet a day (BSCFD) of natural gas. These investments will support the continued focus on employing advanced technologies in well completion and reservoir management practices.
- Crude oil production in the country has decreased by 3.5%, to 556.6 million tonnes, in 2019 from 576.8 million tonnes in 2018. The decrease in oil production may act as a restraint on the Saudi Arabia completion equipment and services market.
- Hence, Saudi Arabia 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 Middle East 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 National-Oilwell Varco, Inc.
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