Technavio projects the global oil and gas upstream equipment market to post a CAGR of over three percent during the forecast period. The increase in oil rig count is a key driver which is expected to impact market growth.
With the gradual stabilization in crude oil prices and the increasing rig count, exploration, and drilling projects that were initially on hold are likely to resume. Also, the increase in new exploration and drilling projects is likely to raise the market potential for oil and gas upstream equipment during the forecast period.
In this report, Technavio highlights the rising investments in shale industry as one of the key emerging trends in the global oil and gas upstream equipment market:
Rising investments in the shale industry
The shale industry is experiencing high investments, especially in the US, with financiers pouring in cash to help producers increase the output. Investments in conventional crude oil are moderately slow, with the International Energy Agency (IEA) estimating a rise in investments in the oil and gas industry by around three percent in 2017. However, the shale industry is likely to witness a higher growth rate during the forecast period.
Oil companies are focusing on investing in short-cycle shale projects that reduce risks and provide a quick return on investments. For instance, the China Energy Investment Corporation plans to invest over USD 83 billion in chemical manufacturing and shale gas development projects in West Virginia. This is one of the major investments by the company in West Virginia, and it will provide mutual benefits to both China and the US.
According to a senior analyst at Technavio for oil and gas research, “Rising investments in the shale industry are likely to boost the market potential for the global oil and gas upstream equipment market. Several companies, including Chevron, ConocoPhillips, and ExxonMobil, are increasing investments in the shale industry to drive production growth.”
Market segmentation and analysis through 2022
This market research report segments the global oil and gas upstream equipment market based on application (exploration and drilling, completion and production, and others) and key regions (the Americas, APAC, and EMEA).
In 2017, the Americas dominated the global oil and gas upstream equipment market with a market share of more than 55 percent followed by EMEA and APAC. While the market share of the Americas and APAC is expected to witness a small increase over the forecast period, the market share of EMEA is expected to decline by almost one percent.