The oilfield equipment & services comprise all the products & services associated with mostly upstream energy industry, such as drilling, well logging, well intervention, well completion, etc. The services provided by the equipment rental players, such as repair, maintenance of tools & equipment, machine assembly, among others, have broadened the market scope. The oil & gas industry is moving towards technology adoption along with automation in drilling equipment, which has inclined oil & gas companies towards oilfield equipment on a rental basis to smoothen the processes, including horizontal drilling, deep drilling, and exploration of unconventional hydrocarbons.
In accordance with this arrangement, the exploration companies rent equipment on a contractual basis, which allows them to lower their costs. Therefore, the rapid oilfield exploration activities in Saudi Arabia, coupled with the rising interests of global oil & gas exploration players across the country, would flourish the demand for Oilfield Equipment Rental in the coming years.
Saudi Arabia Oilfield Equipment Rental market is projected to grow at a CAGR of around 8% during the forecast period, i.e., 2022-27. The rising expansion of existing oilfield reserves in Saudi Arabia has increased the production capacity of the country, resulting in an increased demand for oilfield equipment rental, such as drill pipes. Moreover, the rapid research & developments in the fields of the oil & gas industry would further explore the untapped oil field reserves in the near future.
Significantly, such discoveries, as well as expansion of existing oilfields, would create revenue opportunities for oilfield equipment rental providers in the forthcoming years, thereby driving the market of the Saudi Arabia Oilfield Equipment Rental. In addition, the further expansion of other existing oilfield reserves would upsurge the demand for oilfield equipment rental in the forecast years, 2022-27.
|Study Period||Historical Data: 2017-20|
|Base Year: 2021|
|Forecast Period: 2022-27|
|Key Companies Profiled||Baker Hughes Company, Parker Wellbore, Schlumberger Middle East, Superior Energy Services, Seadrill Ltd., Weatherford International PLC, Nabors Industries Ltd., Certified Oilfield Rentals LLC (COR Middle East), Great Valve General Contracting (GVGC), Others|
|Unit Denominations||USD Million/Billion|
Impact of Covid-19 on Saudi Arabia Oilfield Equipment Rental Market
The imposition of stringent mobility restrictions across the globe led to a notable decline in the oil demand during 2020. This further led to low crude oil exports to its regular crude oil consumers, including India, China, Japan, the US, among various others. According to British Petroleum (BP), in 2020, Saudi Arabia’s oil production stood at 11,039 barrels per day, which was a decline of nearly 7%, from 11,832 barrels per day in 2019.
Consequently, the country felt a noteworthy decline in the demand for oilfield equipment rental due to low oilfield exploration in the mid of 2020. However, the relaxation of lockdown measures in the latter part of 2020, led to the rebound of oil demand across the globe. Consequently, the demand for Oilfield Equipment Rental regained in 2021. As a result, in the coming years, the COVID-19 is expected to have an insignificant impact on Saudi Arabia Oilfield Equipment Rental market.
Based on Type:
Of them all, drilling equipment grasped a considerable share in the Saudi Arabia Oilfield Equipment Rental market. The demand for drill pipes & drill collars have been high due to their primary work function that enables the drilling fluid to be pumped down from the hole through the drill bit & then back up the annulus. This continuous process requires a large number of drilling equipment for oil exploration.
Furthermore, the burgeoning government investment towards the construction of new oil refineries, coupled with the discovery of new oil & gas fields, is creating a lucrative opportunity for the growth of the drilling equipment rental market in the forecast period.
Among the two, Onshore grabbed a considerable share in the Saudi Arabia Oilfield Equipment Rental market over the last few years due to the presence of a large number of onshore oil reserves in Saudi Arabia. Further, according to the US Energy Information Administration, the country has been the world’s second-largest hub of oilfield reserves, with a production capacity of 259 billion barrels as of 2020.
Additionally, the major onshore & offshore oil fields are located in the eastern part of Saudi Arabia. Besides, the surging investment toward the onshore drilling activities is expected to augment the need for oilfield rental equipment such as drill pipe, mud pumps, drill collar, etc., in the forthcoming period.
Recent Developments by the Government or Leading Companies
Key Driver: New Discoveries & Expansion of Oilfields in Saudi Arabia
Saudi Arabia Oilfield Equipment Rental market countersigned the prolific growth in the historical years, owing to the oil mines expansion activities in the region. As Saudi Arabia is blessed with a large number of oil reserves, both onshore & offshore, the country has been one of the largest oil exporters in the world, which continues to increase the demand for equipment rental services such as jack-ups & drillships.
Furthermore, the expansion of existing oil field reserves also decently contributed to the growth of the Saudi Arabia Oilfield Equipment Rental market. Additionally, Saudi Arabia has been fortunate enough to have several existing oilfields & technological advancements, which have led to the discovery of untapped reserves of oil & gas. In turn, this has positively affected the oilfield equipment rental market in the country.
Possible Restraint: Maintenance of Oilfield Equipment Rental on Offshore Platform
The burden of maintaining oilfield equipment over offshore platforms has posed a challenge for the Saudi Arabia Oilfield Equipment Rental market. The equipment, including drill pipes, drill collars, pressure & flow control equipment, etc., require perpetual greasing, polishing, rust-coating, & other maintenances to keep it running smoothly. Therefore, the high cost of maintaining the sizeable fleet of oilfield equipment when the equipment is not in use becomes an additional cost burden for the rental companies to incur.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The Saudi Arabia Oilfield Equipment Rental Market is expecting around 8% CAGR during 2022-27.
A. Drilling Equipment is expected to emerge as an opportunity area for the leading players in the market during the forecast period.
A. The rising number of new oilfield discoveries as well as the increasing capacities of oil & gas exploration would be some of the key growth opportunities for oilfield equipment rental providers in the forthcoming years.
A. The relaxation of COVID-19 lockdown measures in countries across the world has stimulated the global oil demand in 2021. Subsequently, Saudi Arabia is anticipated to accelerate its oil & gas supply with an extended exploration of oilfields in the years to come. Therefore, it would present a positive growth outlook for Saudi Arabia oilfield equipment rental market in the upcoming years.