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Pump Jack Market Overview
The global pump jack market size stood at $2,712.8 million in 2016, it will grow at a CAGR of 5.0% during 2017 - 2023. The growing number of mature oilfields in North America has been the major factor driving the growth of the pump jack market.
Geographically, North America has been the largest market for pump jack and it is also expected to be the fastest growing market during the forecast period. The mature field redevelopment prospects show improved return on investment (ROI). This creates plenty of opportunities in the North American market, boosting the growth of the pump jack market.
Pump jacks are used to mechanically lift liquid from well, in case of insufficient pressure in the well to automatically push the liquid on the surface. This arrangement is commonly used for onshore wells. A pump can produce 5 to 40 liters of liquid each stroke, depending on the size of the pump. Modern jack pumps are powered by prime mover, which can pump around 20 times per minute, wherein the amount of oil depends upon the size of pump.
It is widely used in the onshore oil production, as reservoir pressure and energy are generally low. For this purpose, artificial lift of reservoirs fluid is required through well pumping in order to achieve desired and commercial flow rate. Once the well is completed, cased, capped, and collared at the surface, jack pumps are used to pump oil from the well.
Pump Jack Market Dynamics
Growing demand for energy, increase in exploration activities, increase in the production of oil and gas, and artificial lift systems are the major drivers of the pump jack industry.
The need to develop an automated solution for the efficient and economic extraction of oil from mature oilfields is the key trend witnessed in the pump jack market. Jack pump have made a huge impact on the petroleum industry, as they allow even the last barrel of oil to be extracted from oil fields. The increasing number of mature oilfields, specifically in North America, are leading to its growing demand in the petroleum industry. With its usage, oil extraction becomes more efficient and it allows operators to reach the untapped oil in the ground, which increases the life of a well by many years.
As the U.S. is one of the main oil producing countries, jack pump plays a significant role in the U.S. market, as number of wells in the country have already reached the level of depletion and producing less than 10 barrels of oil per day. These wells cannot be economically restarted once they are shut down. Hence, majority of them are kept alive by oil well pump jack. The life of the wells can be extended by years through improved pump efficiency, without adding any significant operational cost. Hence, the pump jack market would be witnessing huge demand from the U.S.
Operational changes on a pump jack require on site mechanical adjustments, without installing any additional control hardware. Hence, they have low installation cost which is an added advantage for oil field developers. Also, computer-based technology is used to monitor and analyze pump systems in real-time from far away, quickly and with minimum human interference.
Growing energy demand, and increasing exploration and production activities drives the growth of the pump jack market. As reported by EIA, the global energy consumption is projected to increase from 575 quadrillion Btu in 2015 to 736 quadrillion Btu by 2040, an increase of 28%. Non-OECD regions are projected to contribute majorly in the energy consumption, such as energy use in transportation sector is expected to rise by nearly 30% between 2015 and 2040, and industrial energy demand is expected to account for over 50% of the total energy consumption in 2040. The growing global population is projected to increase by around 1.5 billion people to reach almost 8.8 billion people by 2025, owing to the increase in global energy consumption.
As per OECD report, the worldwide oil consumption is projected to increase from 85.1 million barrels per day to 99.8 million barrels per day by 2040, an increase of 17% in world oil consumption (it does not include other source of energies such as gas, coal, nuclear, hydro, biomass and other renewables).
Mature oilfields and stripper wells, both employ pump jacks for oil extraction due to its improved crude oil production. This greatly contributes to the pump jack market growth.
The maintenance costs of pump jacks are relatively high and there are also some mechanical issues associated with the equipment. The major cost associated with pump jack is the maintenance of the sucker rods which hang below the equipment into the well. Sucker rods are driven by the sucker rod pump that is placed at the bottom of the well. As the pump jack rocks back and forth, the rod string, sucker rod, and sucker rod pump get activated.
To find and maintain the ideal setting on each well can be expensive, due to the mechanical nature of stroke speed and stroke length adjustments on a pump jack. These conditions are expected to negatively impact the pump jack market growth.
Pump Jack Market - Competitive Landscape
Some of the major players operating in the pump jack market are Schlumberger Limited, General Electric Company, JCPump LLC, Young’s Welding Inc., Halliburton Company, Weatherford International, Cook Pump Company, Drake Manufacturing Company, Inc., Dansco Manufacturing, Inc., and LS Petrochem Equipment Corporation.