The global offshore rental equipment market is expected to observe significant growth over the next seven years owing to increasing investments in deep and ultra-deep sea especially in the Gulf of Mexico and North Sea region. Globally, energy demand is anticipated to rise at a steep pace over the foreseeable future owing to high consumption rates chiefly in the emerging BRICS and Southeast Asian economies. Offshore drilling activities globally have increased over the past few years with oil & gas companies focused on developing the untapped reserves in West Africa and Latin America. Stringent government regulations and environment norms in countries such as UK, U.S. and Norway has enforced oil & gas companies to use the best possible products complying with safety standards.
This has resulted in offshore equipment renting a viable option for the contractors than buying them as it results in lesser equipment costs. Customized products demand is presumed to increase with growing number of contractors opting for the same owing to different operating conditions at various drilling sites under varying weather conditions. These aforementioned factors are projected to drive offshore rental equipment market growth over the foreseeable future. High capital expenditure along with rising customization costs is anticipated to negatively affect industry growth over the next seven years. Expansion activities in existing reserves along with increasing development of untapped reserves are presumed to provide colossal opportunities to offshore rental equipment market participants over the forecast period.
On the basis of product type, the global industry has been segmented into flow, pressure and drilling equipment. Drilling equipment was the largest product segment in 2014 and the trend is expected to continue over the foreseeable future owing to increasing hydrocarbon E&P activities. Cost-effectiveness associated with renting offshore drilling equipment as compared to buying them as it helps cut down on maintenance costs is expected to further benefit the product segment growth. Drill pipes are projected to be the most widely used drilling equipment as compared to others such as test plugs, cup testers, hevi-wate and rotary subs. Flow and pressure equipment are anticipated to witness considerable industry growth on account of technological advancements coupled with increasing investments in R&D associated with product development.
North America was the leading offshore rental equipment consumer in 2014 and the trend is expected to continue over the forecast period owing to increasing energy efficiency demand in the region. U.S. is anticipated to be the frontrunner over the foreseeable future on account of increasing shale gas E&P coupled with growing ultra-deep drilling activities in the Gulf of Mexico region. Technological advancements in product design & functioning is anticipated to augment industry growth in this region. Asia Pacific is presumed to observe considerable growth over the foreseeable future owing to growing number of oil & gas E&P projects in the region.
China, India and Indonesia are expected to be the leading markets on account of developments in discovery and extraction of unconventional reserves such as shale and CBM within the region. Africa is projected to observe above average market growth owing to increasing oil & gas production coupled with several new entrants in the region. These include Angola and Mozambique who have increased their oil & gas production rates in the recent years. Middle East is presumed to witness significant industry growth owing to increasing production capacities especially of OPEC nations along with growing energy exports from the region.
Offshore rental equipment industry is highly consolidated with few major participants dominating the global market. Key players operating in the global offshore rental equipment market include Norwegian Offshore Rental AS, Aquaterra Energy, Weatherford International and Ferguson Group. Innovative product development satisfying the contractor’s need and complying with safety standards is projected to be the key strategy followed by industry participants to increase their market presence. M&A, JV’s and product line expansion are anticipated to be other strategies followed by industry players to increase their market share over the next seven years.
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The ongoing pandemic has led to a decline in exploration activities in the oil & gas sector. A number of EPC projects have also witnessed an indefinite pause that has transpired into a slump in the requirement for drilling and excavation services. Economic repercussions of the trend are expected to be highly evident in the Middle East. The report will account for Covid19 as a key market contributor.