The world oilfield equipment market is projected to increase 2.9 percent per year through 2012 to $85 billion, marking a drastic deceleration from the 2002-2007 pace, according to a report by The Freedonia Group (www.freedoniagroup.com). The report, titled World Oilfield Equipment, predicts the global economic slowdown and major reduction in crude oil prices as of late 2008 will most likely reduce oil and gas equipment sales for much of 2009. However, after that, growth is expected to accelerate, as China and India continue to recover and resume development projects.
Freedonia says the most rapid growth in oilfield equipment demand through 2012 will occur in a few countries in the developing world, where oil and/or gas production is expected to rise strongly, particularly Brazil, China and Kazakhstan. Offshore regions of western Africa, such as Nigeria and Angola, also hold strong growth prospects, assuming the political and economic environments in those areas remain relatively stable. In China and Qatar, natural gas-related drilling is expected to grow particularly fast.
Meanwhile, maturity and declining output of fields located in the United States, Mexico, Venezuela, Norway and the United Kingdom will work to suppress oilfield equipment markets in these countries, although there will be opportunities in repair/maintenance and enhanced oil recovery activities. In Mexico and Venezuela, growth could become stronger if foreign technologically advanced energy companies are allowed greater rights to drilling and exploration activities, a domain that is currently monopolized by inefficient state-controlled entities in both countries, according to Freedonia.
Freedonia says that as drilling operations increase in complexity, the industry is becoming more reliant on high-technology services, such as directional drilling control and logging- and measurement-while-drilling. As such, Freedonia says prospects for certain products are more favorable in the near term, particularly for fixed-cutter drill bits and advanced well logging equipment. The large tubular goods market will continue to benefit from increases in drilling efficiency, with gains in casing demand being bolstered by a trend toward greater footage drilled per rig.