Europe oilfield equipment market size was valued at USD 16.39 billion in 2014. Growing crude demand has been prompting exploration & production companies in Europe to get involved in extensive drilling activities in onshore and offshore locations. The rising number of crude field production in the region owing to deepwater discoveries in the North Sea is expected to drive overall demand over the forecast period.
Manufacturing companies have been shifting their focus on developing a complete solution for crude producers to maximize their revenues and gain a competitive advantage over other industry participants. In addition, companies have been extensively involved in R&D to develop shale gas extraction technologies owing to decreasing production from fields.
Declining crude prices in recent years have drastically impacted the Europe oilfield equipment and service market. In 2015, there was around more than a 4.7% decline in global machinery revenues. Lower prices are forcing its producers to shut their short-term projects and focus only on long-term projects. This is resulting in a fall in machinery demand.
In addition, offshore drilling contractors in Europe have started cutting costs and are reducing new capacity additions to minimize their losses. Equipment rental industry participants including Transocean are either accepting rig prices quoted by the buyer or postponing the deliveries in order to overcome the losses caused owing to decreasing crude prices.
All these factors are resulting in a fall in machinery revenues. According to industry professionals, crude prices are expected to recover after 2017 which also means machinery revenues are expected to drive after a period of two years. But as crude price fluctuations are difficult to predict, it is difficult to anticipate their impact on equipment revenues over the forecast period.
Norway holds the second-largest oilfield equipment market position in Europe after Russia. The country accounted for a revenue share of 22.58% in 2014 and is expected to increase over the forecast period. This is on account of continuously increasing oilfield discoveries and production rates over the forecast period. UK revenue share is also expected to rise over the foreseeable future owing to oilfield discoveries owing to increasing government initiatives to develop the country’s an oil & gas industry.
The drilling equipment segment possesses the highest market penetration and is on the high growth rate-high penetration side as piercing fields require a maximum number of machines including rigs, bits, and pipes which are extremely expensive in nature. Therefore, the segment generated maximum revenues as compared to other segments. In addition, the majority of fields in Europe are offshore mainly in Norway and the UK which arises the demand for more complex and expensive technologies and equipment as compared to onshore drilling equipment.
The market is expected to continue its dominance over the forecast period on account of energy development activities in Norway, Russia, and the UK. In addition, directional & horizontal drilling technology is expected to maximize further profits.
European government initiatives to develop shale gas in the region are expected to drive further drilling equipment market segment over the forecast period. The field production machinery segment is expected to grow at a lower CAGR over the forecast period owing to less technological advancement in the segment.
The machinery includes lifting devices and wellheads. The pumps and valves segment is expected to grow at a medium CAGR of 1.5% from 2015 to 2022. Technological advancement in the segment is expected to emerge as a major market driver. For instance, digital systems demand is high across the region. In addition, manufacturing is developing high-performance raw materials for pumps which is also expected to drive market revenue over the forecast period.
The others segment is expected to witness high growth as the segment consists of well-surveying devices and machinery. The segment is expected to grow at significant rates owing to enhancing downhole and wireline measurement techniques.
Russia was the leading market on account of the highest number of oilfield development activities. The country is one of the major crude producers in the world. In 2014, the Russian Federation produced around 10,838 thousand barrels of oil per day according to BP statistics. Lower oil prices coupled with geopolitical issues are expected to impact the Russian oil & gas industry which in turn is expected to impact oilfield equipment market revenues over the forecast period. Therefore, the Russian market is expected to grow at a lower CAGR of 1.8% from 2015 to 2022.
As oil production activities are directly proportional to field machines demand, the country covered the maximum share of the overall market. This trend is expected to continue over the forecast period.
Norway is expected to grow at the highest CAGR owing to growing offshore field development activities on account of the presence of the North Sea. UK is also expected to grow at a high CAGR and generate significant revenues owing to increasing offshore activities as compared to onshore.
Europe oilfield equipment value chain includes raw material procurement, fabricators, manufacturers, distributors, application, and post service. Oilfield equipment, including drilling equipment, pumps & valves, and field production machinery, is mainly manufactured using metals or alloys provided by metal manufacturers and Original Equipment Manufacturers (OEMs). OEMs are available in huge numbers in the European market allowing the manufacturer to easily switch from one OEM to another in order to provide the best service to the customers. Moreover, there are fewer chances of forwarding integration by raw material suppliers as metals have a huge demand in Europe, mainly in the construction, automotive, and mechanical engineering segment.
Major industry participants manufacturers based in Europe include Zenith Oilfield Technology, SBS Oilfield Equipment GmbH, Atlas Copco, Schoeller-Bleckmann Oilfield Technology GmbH, Foster Wheeler AG, KSB AG, Sandvik AB, Vallourec, Sulzer Limited, Technip SA, and Tenaris SA.
There is a high degree of integration by Aker Solutions which is specialized in manufacturing, distributing, and energy business. Europe is continuously working on strengthening its distribution network within the region as well as outside the region.
A large number of rental companies are based in Europe, which includes Transocean. The company is a major rig rental supplier, which provides rigs to energy producers on a rental basis.
Base year for estimation
Actual estimates/Historical data
2013 – 2014
2015 - 2020
Revenue in USD million and CAGR from 2015 to 2020
UK, Norway, Russia, Rest of Europe (RoE)
Revenue forecast, company share, competitive landscape, and growth factors and trends
15% free customization scope (equivalent to 5 analysts working days)
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This report forecasts revenue and revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2015 to 2020. For this study, Grand View Research has segmented the Europe oilfield equipment market on the basis of product, and region.
Product Outlook (Revenue, USD Million; 2012 - 2022)
Pumps & Valves
Field Production Machinery
Regional Outlook (Revenue, USD Million; 2012 - 2022)
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