Middle-East Oilfield Services Market Report 2022-2027: Drilling Services Segment and Saudi Arabia to Witness Significant Growth – ResearchAndMarkets.com
DUBLIN–(BUSINESS WIRE)–The “Middle-East Oilfield Services Market – Growth, Trends, COVID-19 Impact, and Forecasts (2022 – 2027)” report has been added to ResearchAndMarkets.com’s offering.
The Middle-East Oilfield Services Market is expected to grow with a CAGR of 5.5% during the forecast period
The COVID-19 pandemic had a highly adverse impact on the oilfield services market. The unprecedented collapse in oil demand caused by the pandemic resulted in a halt in greenfield investments by the upstream companies and delays in the ongoing projects. Thus, the demand for oilfield services reduced during the pandemic, which got reflected in low revenues for the industry players.
As an example, Halliburton, one of the leading players, recorded the revenue for 2020 as USD 14.44 billion, a 35% reduction as compared to 2019, which was around USD 22.4 billion. The Middle-East oilfield services market is likely to grow in the future due to the steadily increasing natural gas demand from the developing economies in the region as well as outside the region, which may result in new production projects in the coming years, and the growth in private participation in the oil and gas industry.
However, the rise in momentum towards cleaner energy sources in almost every country is expected to beat the oil and gas demand at the regional as well as global level.
- The drilling services segment is expected to grow at a faster rate during the forecast period due to the umpteen upcoming drilling and completion projects planned recently.
- The technological milestones in the field of oilfield services place a game-changing opportunity in front of the market. The introduction of IoT applications and cloud platforms to facilitate remote monitoring of various services helps in the reduction of operational costs by increasing the speed of work and accuracy. The digital transformation of these services also helps in increasing safety and reducing mishaps occurrences.
- Saudi Arabia is expected to witness the fastest growth in the market due to the highest number of oil fields left to be developed by private companies.
Drilling Services Expected to Witness Significant Growth
- The numerous exploration and production contracts signed in the region has spurred a great demand for drilling services. The drilling services are either offered as a separate service that comes under the well-construction portfolio or sometimes with well-completion services too.
- The average rig count in the Middle-East region has been reduced in the recent past. It was around 265 in 2021, down from 337 in 2020, due to the reluctant behavior of the operators to invest in new projects in the backdrop of low oil demand caused by the pandemic and the global inclination towards sustainable sources of energy. But, the number is expected to get a rebound again in the near future due to the companies’ interest to produce more oil and gas deposits, as many industry experts have predicted that the demand will surpass the current oversupply situation in the next six years.
- Many new drilling projects have been planned recently in the region. For instance, in September 2021, Energean, the UK-based E&P company, offered an integrated drilling services contract to Haliiburton for the development of five wells at the Karish North Gas field located offshore Israel. The scope of work includes directional drilling, drill bits, drill fluids, wireline, cementing, alongwith project management services. The field is estimated to hold 33Bcm of gas and 31 million barrels of liquids. The first gas is expected in 2023.
- Furthermore, in October 2021, Saipem, the oilfield services company, clinched a new onshore drilling contract in UAE to offer services for around one and half years.
- Such developments are expected to give a catalytic effect to the oilfield services market in the region.
Saudi Arabia to Witness a Significant Growth
- Saudi Arabia holds around 15% of the global proved oil reserves and is one of the major crude oil-producing countries in the world. It is the largest crude oil exporter among all the OPEC countries and the second-largest oil producer in the world after the United States.
- The country’s crude oil production was recorded as 11 million barrels per day in 2020, which was the highest among all the GCC countries. Saudi Arabia has recently witnessed an upsurge in the upstream projects planned for the next five years, which largely includes field development projects, resulting in high demand for oilfield services in the country.
- To strengthen the local value chain of the services in the country, the Saudi government gave approval for the construction of the “Oilfield Services (OFS) Regional Hub”, which broke the ground in October 2021, at King Salman Energy Park, Saudi Arabia. The oilfield services industry player Baker Hughes took charge to complete the project. The 300,000 sq meter regional hub is meant to support Baker Hughes’ OFS operations and customers across the Middle East. The project is expected to be commissioned in the second half of 2022.
- Furthermore, in November 2021, the NOC of Saudi Arabia, Saudi Aramco, has awarded the Jafurah gas field development contracts to some domestic and international oil field services companies. It includes 16 subsurface and EPC contracts valued at USD10 billion for the unconventional gas field. Opening the output opportunity for an estimated 200 million standard cubic feet per day, the field is expected to start production in 2025.
- Owing to such developments, Saudi Arabia is expected to have the largest chunk in the oilfield services market in the near future.
The Middle-East oilfield services market is fragmented. The key players in this market include Baker Hughes Co., Halliburton Company, Schlumberger NV, Middle-East Oilfield Services LLC, and Weatherford International plc. among others.
For more information about this report visit https://www.researchandmarkets.com/r/c1e7n7
Laura Wood, Senior Press Manager
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