The global sand control systems market is expected to grow at a CAGR of more than 4% during the forecast period. The global upstream oil and gas investments stood at approximately USD 476 billion in 2018, representing a 6% increase compared to that in the previous year. Adding to this, according to the estimates of Oil & Gas UK, the oil and gas exploration and production companies in Europe are expected to spend about USD 265 billion between 2019 – 2035. Factors, such as increasing demand for oil and natural gas and increasing investments in the upstream oil and gas sectors across the world, are expected to drive the number of exploration and production activities, thereby driving the sand control systems market during the forecast period. However, the crude oil prices have been highly volatile in 2018, fluctuating between USD 85 per barrel and USD 50 per barrel by the end of the year. This volatility of oil prices remains a growing concern for the upstream industry. Hence, this is expected to hinder the market during the forecast period.
- The offshore segment is expected to dominate the market, due to increasing exploration activities.
- The shift of the projects from onshore to offshore, shallow waters to deep waters and ultra-deep waters is an opportunity for the sand control systems market during the forecast period.
- Middle-East and Africa is expected to be the fastest growing market during the forecast period, with the majority of the demand coming from Saudi Arabia, Iran, and others.
Key Market Trends
Offshore Segment to Dominate the Market
- In many offshore regions, the geologic formations that produce oil and gas are unconsolidated, which means the sand that makes up these formations is loose or poorly bonded, much like the sand on a beach. As a result, this loose sand can end up inside the production piping in the well or production equipment on the surface.
- Sand production is highly undesirable, since it can plug pipes and equipment, erode piping (much like sand blasting), and lead to corrosion of pipe and equipment. Eliminating sand production has been one of the main production challenges faced by engineers since the early days of offshore oil and gas development.
- The offshore oil and gas industry accounts for around 30% of the global crude oil production. The Middle-East, North Sea, Brazil, the Gulf of Mexico, and the Caspian Sea are the major offshore oil and gas producing regions. The decline in the offshore rig count had slowed down in 2017, and offshore activity started to pick up after 2017. An estimated of more than 90 offshore projects are in the queue to receive a green signal in the next few years, driving the demand for sand control system in the offshore sector.
- Moreover, the cost of operation in the offshore have declined significantly over the past few years, enough for the industry to start to step up the spending gradually in the coming years.
- Hence, due to aforementioned factors the sand control systems market for offshore segment is expected to positive during the forecast period.
Middle-East and Africa to be the Fastest Growing Market
- Saudi Arabia has oil and gas trapped in sandstone with unique characteristics, which exhibit low-to-moderate permeability but a high sanding tendency caused by unconsolidated rock under high pressure and temperature. Owing to its huge oil and gas production base with high sanding tendency, the country is one of the largest markets for sand control systems in the world.
- Saudi Aramco, the country’s largest oil and gas company, is continuously engaged in exploration and development to compensate for declining fields elsewhere. During the downturn, in contrast to the world, Saudi Arabia has ramped up its rig count since 2014, especially gas wells. The company plans to double its gas production over the next decade, as the country plans to switch to local power plants to gas from oil, so it can export more oil.
- Moreover, Nigeria holds the top position among the ten countries, with the largest remaining crude oil and condensate deep-water reserves. The majority of reserves are along the country's Niger River Delta and offshore in the Bight of Benin, the Gulf of Guinea, and the Bight of Bonny. As of now, exploration activities are mostly focused in the deep and ultra-deep offshore, although some onshore exploration is also taking place.
- Therefore, factors such as upcoming offshore E&P activities especially from the West Africa region is expected to boost the sand control systems market in the region in the coming years.
The sand control systems market is fragmented. Some of key players in this market include Baker Hughes Company, Schlumberger Ltd., Weatherford International Ltd., Halliburton Company, and Superior Energy Services Inc., amongst others.
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