Centralizers and Float Equipment Market Overview
Valued at $991.6 million in 2018, the global centralizers and float equipment market is projected to reach $1,439.3 million by 2024, demonstrating a CAGR of 6.3% during the forecast period. The growth in the market is attributed to the recovery in crude oil prices, coupled with increasing prosperous oil and gas fields.
Centralizers are casing tools that are used to retain uniformity of the cement sheath around the pipe determines. Basically, these tools serve as an effective seal between wellbore and casing. Float equipment is a type of equipment used for reducing strain on derrick, and provides landing platform for bottom and top cementing plugs, and backpressure valve to avoid cement from flowing back into well’s casing’s inner diameter.
Based on equipment type, the centralizers and float equipment market is classified into centralizers and float equipment. Between the two, float equipment held larger revenue in the market by generating value of more than $550.0 million in 2018. Besides, the market for float equipment is expected to witness a CAGR of nearly 6% during the forecast period. The demand for this equipment is generated by rising global oil and gas exploration and production (E&P) projects, coupled with moderate product prices.
Based on application, the centralizers and float equipment market is bifurcated into onshore and offshore. Of these, onshore application held larger market share in both value and volume terms by accounting more than 80% in the market. This significant market share is ascribed to the growing E&P activities in onshore oil and gas fields. Around 80% of the global oil and gas drilling wells took place in onshore fields, whereas offshore fields operations are expected to grow faster than onshore due to newly discovered offshore fields. Thus, the growing demand for well completion equipment is expected to further propel the centralizers and float equipment market in offshore applications during the forecast period.
Centralizers and Float Equipment Market Dynamics
The growth in the centralizers and float equipment market is likely to be driven by the recovery of global crude oil prices, followed by new discoveries of technically feasible oil and gas fields, and growing oil and gas product demand across the globe.
Since mid-2016, crude oil prices are in recovering mode, which in result, encouraging the oil and gas upstream market players to restart E&P projects and bid for new fields. For instance, British Petroleum (BP) plc began the second phase of the Mad Dog oil field operations, Royal Dutch Shell plc announced its plans to develop the Penguins field in the North Sea, and several other global players also demonstrated active participation in E&P operations. Thus, this trend in E&P initiations is expected to propel the centralizers and float equipment market in the forthcoming years.
In addition, economic growth in several countries have propelled the demand for fossil fuels to serve their requirements of domestic transportation, electricity generation, and other allied industries. The growth in energy consumption is expected to increase globally, thereby driving upstream E&P activities in the coming years. As per estimates by the Organization of Petroleum Exporting Countries (OPEC), the global oil demand is expected to rise from 95.4 million b/d in 2016 to 111.1 million b/d by 2040. Thus, this rising demand for oil and gas products is expected to increase the demand for centralizers and float equipment in the coming years.
Volatility in crude oil prices continues to impact the global E&P spending and has the potential to affect the value chain of upstream oil and gas projects in the long run. For instance, the global E&P capex fell from $492 billion in 2015 to $343 billion in 2016. This had been in stark conformity with crude oil prices, which witnessed a slump during the same period. Moreover, crude oil prices are susceptible to economic and political prosperity in oil-producing nations and, therefore, can potentially affect the centralizers and float equipment market growth in the event of geopolitical uncertainty.
Several new discoveries of oil and gas in recent times, such as sedimentary basins and continental shelves of oil and gas in the Arctic Circle and Vaca Muerta (Argentina), provide an opportunity for well completion equipment manufacturers during the forecast period. These new discoveries have a huge potential to produce oil and gas. For example, according to the United States Geological Survey (USGS), the Arctic region is estimated to contain around 90 billion barrels of undiscovered oil, 1,669 trillion cubic feet of gas, and 44 billion barrels of undiscovered natural gas liquid. Hence, increase in oil and gas exploration activities in the Arctic Circle and several other regions in the world is expected to offer growth opportunities to the global centralizers and float equipment market during the forecast period.
Centralizers and Float Equipment Market Competitive Landscape
Some of the major players operating in the global centralizers and float equipment market are Halliburton Company, Weatherford International plc, Centek Group, Ray Oil Tool Company, Downhole Products, Summit Casing Equipment, Sledgehammer Oil Tools Pvt. Ltd., NeOz Energy, Puyang Zhongshi Group Co. Limited (PYSZ), National Oilwell Varco Inc., and Oilmec Drilling Equipments Pvt. Ltd.