Oil & Gas EPC Market to hit US$ 64.7 Bn by 2027

The oil & gas EPC market is expected to grow at a CAGR of ~5% during the forecast period. Some of the key factors that are expected to influence growth include rise in the number of offshore and onshore projects, technological advancements, project sanctioning, and growing focus on improving the supply chain.

Digital technologies will play a key role in improving supply chain performance and mitigate the risks involved in the supply chain. Digital procurement is likely to gain significant popularity during the forecast period, as more number of companies are leaning toward digital technologies to strengthen their foothold in the oil & gas EPC market.

Oil & Gas EPC Market: Overview

· Engineering and construction contractors carry out the detailed design and layout of a project, procurement of materials and equipment, manufacturing of systems, functional testing, and finally deliver a functioning asset or facility to their clients. Sometimes, oil & gas EPC contactors also enter into a service contract with clients.

· EPC services are used by several oil & gas companies.

Oil & gas EPC services are primarily employed in long-term projects that entail complex construction, stringent regulations, and a wide network of contractors and suppliers.

Rise in Deepwater E&P Activities to Drive Oil & Gas EPC Market

· The usage of renewable sources of energy has been rising gradually. However, demand for oil and gas has not declined. Renewable sources of energy help provide clean power. However, it is yet to become a reliable power source, as it requires backup power in the form of hybrid power plants. Growth in population and industrial developments are boosting the global demand for energy.

· Global consumption of fuel increased in 2018. For instance, oil consumption rose by 1.4 million barrels per day, while natural gas consumption increased by 195 billion cubic meters per day. This rise in demand for fossil fuel is compelling companies to increase the production of fuel.

· Oil & gas companies have begun exploring new areas, including operations in more remote and deeper offshore areas, owing to the less number of easy-to-access oilfields. As a result, rise in deep-water and ultra-deepwater exploration & production (E&P) activities is driving the oil & gas EPC market.

Volatility in Prices of Crude Oil to Hamper Oil & Gas EPC Market

· Prices of crude oil are affected by events that can potentially disrupt the supply of oil and gas. These include geopolitical and weather-related issues. Geopolitical events play a significant role in creating uncertainty about the demand or supply of oil and gas. This can lead to higher volatility in prices of oil and gas.

· The Middle East accounts for major share of oil and gas. It is a highly unstable region due to political issues. Prices of oil and gas have been rising steadily after the decrease in prices of crude oil in 2014.

· Volatility in prices of oil effects the production of oil and gas. This is expected to hamper the oil & gas EPC market during the forecast period.

Large Number of Proven Oil & Gas Reserves to Offer Lucrative Opportunities to Oil & Gas EPC Market

· According to annual statistics of the Organization of the Petroleum Exporting Countries (OPEC), 1,492.6 billion barrels of proven crude oil reserves are currently available on a global scale. Of these, more than 80% reserves are under the control of OPEC.

· Led by the boom in shale gas, North America, especially in the U.S., is on track to become the leader in terms of production of oil and gas by 2025

· Thus, large amount of proven oil & gas reserves across the globe is expected to provide significant opportunities to providers of oil & gas EPC services during the forecast period

Transparency Market Research

Recent Developments, Expansions, Acquisitions, and New Contracts

· In October 2018, Fluor Corporation, the U.S.-based oil & gas EPC firm, was awarded the engineering, procurement, and construction of the combined heat and power cogeneration project by Valero Energy Corporation at the latter’s Pembroke Refinery in Wales, the U.K.

· In October 2018, TechnipFMC, a leading oil & gas EPC company, signed an EPC agreement with Middle East Oil Refinery for modernization and expansion of the latter’s existing units and delivery of new units, including a hydrogen production facility, a vacuum distillation unit and a crude distillation unit

North America to Dominate Oil & Gas EPC Market

· North America dominated the global oil & gas EPC market in 2018. The oil & gas EPC market in the region is estimated to expand at a significant pace during the forecast period, due to the ongoing investments in exploration and production of unconventional resources such as shale & tight gas.

· Europe also accounted for considerable share of the global oil & gas EPC market in 2018. Increase in spending on refurbishment and modernization of existing refinery facilities to meet the domestic demand for low sulfur containing petroleum products is anticipated to propel the oil & gas EPC market in the near future.

· The oil & gas EPC market in Asia Pacific is projected to expand at a moderate pace during the forecast period. This growth of the oil & gas EPC market in Asia Pacific can be ascribed to the rise in demand for primary energy, supported by strong economic growth and rapid industrialization & urbanization in the region.

· The oil & gas EPC market in Middle East & Africa is likely to expand at a significant pace during the forecast period. Growth of the oil & gas EPC market in the region can be ascribed to the high potential of untapped oil & gas reserves in the region. As per BP stats, Middle East & Africa had 129.8 thousand million tons of proven reserves of crude oil in 2018.

Oil & Gas EPC Market Highly Competitive

· The global oil & gas EPC market is dominated by large multinational players. Key players operating in the global oil & gas EPC market are TechnipFMC, Plc. WorleyParsons Limited, Saipem SpA, Petrofac Limited, Bechtel Corporation, Mott MacDonald, Fluor Corporation, L&T Hydrocarbon Engineering, John Wood Group PLC, National Petroleum Construction Company, SNC-Lavalin Group, KBR, Inc., Galfar Engineering, Contracting SAOG and Lamprell.

· Oil & gas EPC companies are adopting several strategies such as mergers & acquisitions and investments in new discoveries to enhance their market presence across the globe

Source / More : Transparencymarketresearch.com

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