Growth for Oilfield Equipment Sector

(Global) Global Onshore Drilling to Rise 32%

Investment in the oilfield equipment sector continued to recover last year, reaching US$107 billion in 2019, according to the latest research from analyst firm Westwood Global Energy.

Projected global expenditure for the firms current forecast period, from 2019 to 2023, now sits at US$617 billion, an uptick of US$18 billion on the previous period, from 2014-2018. Findings are published in the latest edition of the firm’s World Oilfield Equipment Market Forecast.

“Based on current projections, OFE expenditure is expected to continue to increase into the 2020s, with oilfield equipment expenditure reaching a forecast peak of US$133 billion in 2023,” the report’s authors state.

Onshore to Dominate Spending

The majority of investment is set to be focused on onshore development, which will account for 55 percent of the total spend, driven by a 32 percent increase in global onshore drilling. Investment in tubular goods and rigs as well as rig equipment are expected to be important cost factors.

“North America, with the expected continuation of growth in U.S. unconventionals, will make up nearly half of forecast onshore expenditure. Despite a continuation of pipeline capacity challenges in Canada, North America will remain the biggest player in the oilfield equipment market over the forecast,” Westwood states.

Expenditure in the North American oilfield equipment market is expected to hit US$38 billion by 2023.

Offshore to Reach US$139 Billion

For the offshore sector, fixed and floating production equipment is expected to be the main driver, bolstered by strong activity in Latin America, where regional expenditure is set to peak at US$15billion in 2022. Overall offshore equipment expenditure is forecast to reach US$139 billion over the forecast period.

“In the Middle East, brownfield developments in a number of countries, including Saudi Arabia, will support expenditure growth in the fixed production platform sector. Westwood expects a significant number of fixed platforms to be deployed across fields such as Berri and Zuluf, supporting growth in the OFE sector, despite significant downside risk due to regional political unrest,” the report’s authors comment.

Headquartered in Aberdeen, Scotland, Westwood Global provides market research and consulting services to the energy industry worldwide.