Global demand for oilfield equipment is forecast to rise 3.8 percent per year through 2016 to $109 billion. Gains will be fueled by a substantial increase in oil and gas production as the world economy rebounds from the general economic weakness triggered by the 2009 global recession.
Growth in oil and gas investment is expected to be especially strong in developing regions, where improving infrastructure will contribute to more drilling activity. These and other trends are presented in World Oilfield Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
Through 2016, most of the faster growth in oilfield equipment demand will occur in a variety of developing countries, while gains in developed markets will tend to be more moderate. China, which dominates demand in the Asia/Pacific region, will experience steady growth as its energy consumption continues to rise. Russia, the world’s largest energy producer, will see oilfield equipment demand grow at a below average pace, but this will represent a substantial improvement on a weak 2006-2011 performance. Growth in demand for oilfield equipment will be especially rapid in Brazil, which is expected to see a major boom in oil and gas production as a number of large discoveries from the last several years are developed to productivity.
The oilfield equipment market will be weaker in developed regions, although North America and Europe are still expected to see moderate gains. Demand for oilfield equipment in the US will rise at about the world average as the production of shale gas continues to expand while crude oil output in the country posts modest but steady growth following decades of decline. In the UK, demand for oilfield equipment is expected to be held back by declining oilfield output, continuing the trend of the past decade. Weak demand growth will not be limited to wealthier nations, however, and Argentina, Mexico, and Venezuela will all be among the world’s more sluggish markets. Of these countries, Argentina and Mexico have suffered from diminishing oil and gas output, and the future output trend in both countries will be flat at best. Prospects for future growth are better in Venezuela, which has recently been the site of massive reserves discoveries, but developing these reserves looks to be more of a long term project.
Picture: © 2012 by The Freedonia Group, Inc.
Source: Freedonia Group