Artificial Lift Market Overview
The global artificial lift market was valued at $8,010.8 million in 2017 and is projected to reach $10,883.1 million by 2023, witnessing a CAGR of 5.3% during the forecast period. The market growth is mainly driven by the increasing number of mature oil and gas fields and growing ultra-deepwater and deepwater activities, worldwide.
GLOBAL ARTIFICIAL LIFT MARKET, BY TYPE, $M (2013–2023)
Artificial lift is used in oil wells to increase the pressure within the reservoir to bring the oil to the surface. It is used when the natural drive energy of the reservoir is not strong enough to push the oil to the surface.
Based on type, the artificial lift market is categorized into electrical submersible pump (ESP), rod lift, progressive cavity pump (PCP), gas lift, and others. The category of “others” includes plunger lift, hydraulic jet pump, and other small lifts. ESP held the largest revenue share in the market during the historical period, with more than 40.0% share in 2017. This can be mainly attributed to its high adoption rate and operational efficiency in terms of production, as compared to other types of artificial lifts.
The artificial lift market is also categorized into pump-assisted and gas-assisted mechanisms. The pump-assisted mechanism held a larger share, of more than 85.0%, in the market in 2017. Pump-assisted mechanism is more commonly used, as it increases the bottom hole pressure of the tubing string to bring sufficient amount of fluid to the surface. Based on the pump-assisted mechanism, the market is further classified into positive displacement and dynamic displacement. Positive displacement held a larger share in the market in 2017.
The artificial lift market is also bifurcated into onshore and offshore applications. During the historical period, these lifts found major application in onshore activities. Onshore application contributed more than 85.0% share to the market in 2017. Onshore oil drilling is less expensive than offshore oil drilling. Besides, the majority of aging wells are found in onshore oil fields; hence, the demand for these lifts is higher for onshore applications.
Globally, North America leads the artificial lift market, followed by Europe. The North American market is also expected to witness significant growth during the forecast period, due to the increased use of technology in Mexico and Canada to cater to the increasing demand for energy from China and India. Also, unlike emerging economies, North America has a large number of mature wells, where these lifts are used to achieve operational efficiency.
Artificial Lift Market Dynamics
The major trend observed in the artificial lift market is the increase in the production from unconventional oil and gas reserves. Increasing number of mature oil and gas fields and growing ultra-deepwater and deepwater activities are the major factors driving the market growth.
The recent trend observed in the artificial lift market is the increase in the production from unconventional oil and gas reserves. Conventional oil and gas resources are depleting at a fast pace, resulting in the shift of focus toward unconventional energy sources. Unconventional production refers to the production through shale formations or tight oil reservoirs.
To meet the ever-increasing energy demand, major exploration and production (E&P) companies are shifting their focus toward the development of unconventional oil and gas reserves, including shale oil, shale gas, tight oil, tight gas, and coal bed methane (CBM), which require artificial lifting during E&P activities for the optimum production of oil. Hence, to boost the oil and gas recovery from wells, companies are increasingly adopting advanced lifting techniques, thus driving the artificial lift market growth.
Over 70% of oil comes from the fields that are more than 30 years old. This is driving the industry’s focus toward these fields. The decline in reservoir pressure in mature fields results in the production of more water than oil. As the development of new wells requires significant investment in order to carry out E&P activities for commercially viable production, operators prefer using artificial lifting techniques in mature wells for the improved recovery of oil to maximize revenue margins.
Additionally, mature fields play a significant role in the global oil production, as recent studies have shown that hydrocarbon production from these fields is likely to account for more than half of the global energy mix for the next two decades. Thus, the increasing number of mature oil and gas fields is expected to boost the artificial lift market growth in the coming years.
Although artificial lift market is expected to witness good growth in the coming years, certain environmental concerns related to these lifts pose a threat to the market growth. Environmental issues associated with unconventional oil and gas production include air emissions caused by pollutants, groundwater contamination due to uncontrolled gas, fluid flows because of blowouts or spills, leakage of fracturing fluid, and uncontrolled discharge of waste water. In order to deal with growing environment concerns related to artificial lifting, governments of various countries have imposed several regulations, which, in turn, are hindering the growth of the market.
Artificial Lift Market Competitive Landscape
Some of the major players operating in the global artificial lift market are Baker Hughes, a GE company; Schlumberger N.V. (Schlumberger Limited); Dover Corporation; Halliburton Company; Borets International Limited; Weatherford International PLC; National Oilwell Varco Inc.; Flotek Industries Inc.; and JJ Tech.