Despite the Oil Glut Creating Losses, the Global Oilfield Equipment Market Surges on

Oilfield equipment can be classified as pumps, valves, field production machinery, and drilling equipment. A combination of all these tools is used to extract oil from both onshore as well as offshore fields. Of all the tools, drilling equipment is perhaps the most important. These are heavy-duty drills that can drill through rock or tough soil in order to reach to the underground reservoir of crude oil. The process of drilling cannot be completed without the essentials of a drilling rig and its related components among oil country tubular goods and drill bits. The former, commonly shortened to OCTG, comprises tubing pipes, casing pipes, and drill pipes.

On the whole, the global oilfield equipment market is projected to progress at a CAGR of 3.80% between 2012 and 2018. Within this phase, the market is expected to rise from a 2012 value of US$93.74 bn to a 2018 estimate of US$117.37 bn. This spells good news for all the established players, as the growing activities of crude oil exploration are creating a high demand for drilling equipment. Currently, this market surge will largely benefit major players such as FMC Technologies, Baker Hughes, Eni, Cameron International, Aker Solutions, National Oilwell Varco Incorporated, Schlumberger, and Weatherford International.

All is not Well in the Oil and Gas Sector

The current spate of overproduction of oil has created multiple problems for many companies. Although the oil and gas industry’s plight does not affect individuals much, those who are directly tied to the sector are left facing the brunt of the challenges. The most recent bad news in the oil and gas sector comes from National Oilwell Varco. The company has had to shut its Houma plant this month, which will cause about 80 skilled employees to lose their job to the crude oil surplus. The Houma-Thibodaux region has already created a loss of more than 2,500 jobs in the oil and gas sector in 2015. Experts predict that at least another 2,000 more are expected to lose their jobs as well. In fact, the oil surplus situation is creating major issues in the U.S. in terms of employment. The nation stood at a 3.2% unemployment rate a few years ago, which was the lowest it had witnessed in a long time. The unemployment rate has risen all the way up to 6% now.

There is still hope for the oilfield services industry, however, as experts have stated that the recent increase in the rate of mergers and acquisitions in the global oilfield services industry will boost activity levels in the global oilfield equipment market.

Current Oilfield Equipment Statistics still Optimistic

Some of the major factors propelling the global oilfield equipment market are the advancements in technology, namely in the fields of enhanced oil recovery (EOR) and improved oil recovery (IOR). Another reason is the move from major traditional sites to unconventional oil and gas fields. As for the oilfield equipment market in the U.S., there is an increase in demand due to the need to be less dependent on imports to meet the oil demands of the nation. But at the same time, regulatory pressure and geopolitical challenges still slow the market down.

North America held 30% of the global oilfield equipment market in 2011. It is still the largest and the fastest growing region in this market. This is expected in view of the shale exploration surge, pointing to a continued demand for oilfield equipment in the near future.


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