September 13, 2016 - 12:23 PM EDT
Print Email Article Font Down Font Up
Top 3 Emerging Trends Impacting the Global Wellhead Equipment Market from 2016-2020: Technavio

Technavio’s latest report on the global wellhead equipment market provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

Hangers account for the largest share of the wellhead equipment market in 2015 with 55%, and it is expected to maintain its lead during the forecast period.

The global wellhead equipment market is segmented by components with hangers dominating the market. Tubing hangers are an important component used in the completion of oil and gas production wells. They are generally available in a number of sizes and specifications, depending upon the nature of the completion activities. Casing hangers provide sealing to the casing head, which prevents blowouts. This is expected to boost the wellhead market as a whole during the forecast period.

Plexus, an engineering firm, launched its new POS-GRIP Python subsea wellhead during Offshore Europe in Aberdeen in September 2015. It is improving the wellhead equipment technology and providing better equipment to handle environmental risks.

Request a sample report:

Technavio’s sample reports are free of charge and contain multiple sections of the report including the market size and forecast, drivers, challenges, trends, and more.

The top three emerging trends driving the global wellhead equipment market according to Technavio energy research analysts are:

  • Investments in oil and gas industry
  • Fluctuation in operational rigs
  • Increase in deepwater and ultra-deepwater exploration

Investments in oil and gas industry

Investments in the oil and gas industry decreased in 2015, due to plunge in oil and gas prices. Overall, investments worth USD 380 billion were delayed globally in 2015-2016. Global oil and gas investment is expected to fall to its lowest in 6 years to USD 522 billion in 2016. Total, a leading oil and gas end product company, announced a reduction in its upstream expenditure in 2016. The company declared its plans to reduce the CAPEX from USD 28 billion in 2013 to USD 21 billion in 2016.

REPSOL declared a 40% reduction in its upstream expenditure in 2016 as compared to 2014. In its latest strategic plan, the firm readjusted its upstream focus on only three regions till 2020- North America, Latin America, and Southeast Asia.

According to Sayani Roy, a lead analyst at Technavio for research on oil and gas sector, “Oil prices are expected to remain low for a while, however, post 2017, its prices and investment cycle will stabilize. Consequently, the wellhead market is projected to register a better growth post 2018 after the stabilization of oil prices.”

Fluctuation in operational rigs

The recent downfall in the price of crude oil in the oil and gas industry results in the decrease in rig counts globally. As the rig count is decreasing, so has the use of wellhead equipment in the oil and gas industry. For instance, Baker Hughes reported a decline in the number of rotary rigs by 30 in the month of February 2016, with the final number standing at 541. There has been a decline of 817 rigs over the last year for the company. As there are huge cuts in the capital budget for exploration and production companies, it is directly showing its impact on the number of rigs being operational in the US.

Many rigs are idle now or in shutdowns mode, which results in decrease in the use of wellhead equipment in the oil and gas industry. If companies would wait for an increase in oil and gas prices, there will be chances of around 850 rigs to be idled this year. This will have a direct impact on the wellhead equipment industry for oil and gas companies.

Increase in deepwater and ultra-deepwater exploration

Reservoirs are being discovered since long to meet the demand and supply of petroleum products. For instance, in 2015, Petrobras and Oil and Natural Gas Corporation (ONGC) have found a new reservoir of light oil in deep waters off the coast of the northern state of Sergipe, Brazil. In recent years, the oil and gas industry growth curve has declined, owing to the decrease in oil prices, which led to the declining of growth of the oil and gas industry worldwide.

In 2015, an Israeli company discovered a massive oil reserve in the Golan Heights. It is 10 times larger than the average oilfields that are found worldwide. Another instance was when BP confirmed a new discovery of a reservoir in east of Montrose in the central North Sea. This reservoir is capable of producing more than 5,000 barrels per day and is worth more than USD 2.13 billion. This increase in discoveries of reservoirs is driving the wellhead market and driving its growth.

Browse Related Reports:

Do you need a report on a market in a specific geographical cluster or country but can’t find what you’re looking for? Don’t worry, Technavio also takes client requests. Please contact [email protected] with your requirements and our analysts will be happy to create a customized report just for you.

About Technavio

Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

If you are interested in more information, please contact our media team at [email protected].

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770

Source: Business Wire (September 13, 2016 - 12:23 PM EDT)

News by QuoteMedia

Legal Notice