The solid control equipment market is expected to grow at a CAGR of around 2.5% during the forecast period. Factors such as increasing demand for energy and growing concerns regarding safety and environmental impact of drilling and waste management are expected to drive the market across the world. However, due to the outbreak of COVID-19, slow down, or delay of oil and gas projects are likely to hinder the market growth during the forecast period.
- The offshore oil and gas sector is likely to witness significant growth during the forecast period, owing to its increasing investment to meet the rising energy demand.
- The oil and gas industry is mostly dominated by countries like the United States, Saudi Arabia, Russia, Iran, and Iraq. But in 2019, new oil and gas discoveries in other countries such as Guyana in South America and Ghana in the African region, there is expected to have ample drilling activities, which is likely to create opportunities for the solid control equipment providers in the near future.
- North America is likely to dominate the market during the forecast period, with the majority of the demand coming from the United States and Canada.
Key Market Trends
Offshore Sector to Witness Significant Growth
- Solid control equipment is used in oil & gas upstream sector, to separate the solid particles out of the drilling fluid. The activity helps a drilling operator to reuse the drilling fluid without disposing it into the environment.
- Solid control equipment consists of several processes. The most widely used are shale shaker, desander, desilter, and vacuum degasser. A centrifuge is another process in the solid control equipment, which is primarily used to segregate solid particles of around 5 microns.
- As of December 2019, there are nearly 245 active offshore drilling rigs around the world. With active participation from countries like Brazil concentrating more on offshore activities due to its high presence of hydrocarbon reserves on offshore locations, the sector is likely to have significant growth during the forecast period.
- But, with the spread of COVID-19, the sector has been negatively impacted during 2020. Multiple projects are canceled or delay due to low international crude oil prices and lack of workforce to operates the activities. As per industry experts, the impact is estimated to remain until 2021, and thereafter the sector would gain momentum with an increase in crude oil price.
- However, amid global pandemic, in June 2020, the Norwegian Petroleum Directorate (NPD) has granted Neptune Energy for drilling permits for two wildcat wells (34/4-15 S and 34/4-15 A) drilling in the North Sea off Norway. The wells are estimated to be drilled from the Deepsea Yantai drilling rig.
- Moreover, in June 2020, the Scottish government has set up a fund, worth of approximately USD 78 million to help the energy sector recover from the economic impact of COVID-19 and the oil & gas price crash. Therefore, such steps are likely to help to overcome the negative impact and would help the market to rebound and grow during the coming years.
North America to Dominate the Market
- North America is one of the leading regions that have a significant presence in the oil & gas industry. The region is the second-largest contributor of crude oil after the Middle-East. Contributed to around 23% of global crude production during 2018.
- With the increasing number of oil & gas projects in countries such as the United States, Canada, and Mexico, the region is likely to witness robust growth in the coming years. The United States is one of the largest producers of crude oil and natural gas, accounting for around 15% and 21.5% of the global production, respectively, in 2018. The production surged in 2017, mainly due to robust drilling in its shale reserves, led by the Permian Basin.
- The United States has one of the largest, technically-recoverable shale gas reserves and the second-largest tight oil reserves in the world. The technological developments in hydraulic fracturing have supported the oil & gas drilling activities on the onshore region, resulting in high demand for solid control equipment.
- Moreover, as of April 2020, the United States has nearly 374 active drilling rigs, using solid control equipment on both onshore and offshore platforms. With upcoming projects like Constellation in the United States Gulf of Mexico, the country is expected to have further uses of solid control equipment during the upcoming years.
- Canada, on the other hand, is second-largest producer of oil and gas in the region. The oil and gas industry plays an important role in the country’s economy. Oil sands remain its primary source of hydrocarbon production, comprising over 90% of the country's total oil reserves.
- Orphan drilling project in Canada is one of the prominent upcoming drilling project, which is located 350 km east of St. John's. It is a nine-year project, initiated in 2017 and is estimated to have 20 explorations well by 2026, which is likely to boost the solid control equipment market in the region.
The solid control equipment market is moderately fragmented. Some of the key players in the market include Schlumberger Limited, Halliburton Company, Weatherford International Plc, Baker Hughes Company, GN Solids Control, Derrick Corporation, KES Energy Equipment Manufacturing Hebei Co. Ltd, China Petroleum Technology & Development Corporation (CPTDC), KOSUN Machinery Co. Ltd, and ORS International Ltd.
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