The global Oil Country Tubular Goods (OCTG) market is anticipated to witness strong growth over the forecast period owing to increasing drilling and production activities. Rising demand for premium pipes coupled with the advent of technologically advanced pipes. Appropriate selection of OCTG during drilling activities helps save overall cost and reduce the chances of causing hazards. Market growth also depends on the improvements in efficiencies and advancements in well drilling technology to improve the recoverability of oil and gas resources. Rising demand for advanced OCTG products in new areas of unconventional resources has a potential opportunity for companies to invest in new product development to differentiate themselves from their competitors.
A notable trend that can be observed in the OCTG industry is accelerating rig count coupled with improvement in footage of wells drilled. Also, ongoing implementation of hydraulic fracturing technology and horizontal drilling is anticipated to spur the industry growth significantly. According to Energy Information Administration (EIA), in 2016, hydraulically fractured wells accounted for around 68 % of all natural gas and oil wells drilled in U.S. and 83% of the overall linear footage drilled. Horizontal drilling activities in U.S. boost the demand for premium-grade products, providing better margins on OCTG. Based on the product categories, the OCTG market can be segmented into drill pipe, casing, and tubing. Oil country tubular goods are manufactured as seamless or welded tubes and pipes.
Capital investment for the production of seamless OCTG is quite high in contrast to the investment required for the production of welded products. Welded pipe segment is anticipated to have the highest CAGR over the forecast period owing to the active participation of companies in improving the product efficiency with a focus on cost-cutting strategies. On the basis of grade, the Oil Country Tubular Goods (OCTG) market is bifurcated into American Petroleum Institute (API) certified- and premium-grade. The API has set certain standard specifications for OCTG based on their properties including ductility, temperature, and thermal compatibility. Based on location, the market can be categorized into onshore and offshore areas. Onshore was the largest application sector in 2017.
Increasing global offshore rig count is projected to drive this segment in the coming years. In addition, substantial expansion of the existing offshore wells both in deep and ultra-deep waters, mainly in the Gulf of Mexico, Persian Gulf, North Sea, and the South China Sea, is expected to drive the OCTG demand in the segment over the forecast period. Geographically, Asia Pacific holds the largest market share owing to growing exploration activities of deep-water and unconventional reserves, which is gaining the attention of prominent market players. Increasing number of technological advancements to help increase productivity and reduce production costs are also playing a vital role in the region’s growth.
North America follows the Asia-Pacific region with U.S. accounting for the major share. This growth is attributed to factors, such as growing offshore drilling activities in the Gulf of Mexico, shale boom, and surge in discovering potential untapped oil and gas reserves. The EMEA market is expected to witness stagnant growth over the next eight years. Prominent market leaders include Vallourec S.A.; Tenaris S.A.; Tenergy Equipment and Services Ltd.; National oil well Varco, Inc.; Arcelor Mittal S.A.; Nippon Steel & Sumitomo Metal Corp.; and Sumitomo Metal Corporation. Other emerging market players include U.S. Steel Tubular Products, Inc.; Tmk Ipsco Enterprise, Inc.; JFE Steel Corp.; SB International, Inc.; and Evraz PLC. Companies are more focused on developing advanced technology-based products owing to the growing industrial demands for advanced technology for drilling purpose.
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