AFRICA WELL INTERVENTION MARKET 2014 - 2019 Market Shares, Forecasts & Trends
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2. RESEARCH METHODOLOGY
This research study involved the use of extensive secondary sources, directories, and databases to identify and collect information useful for this extensive technical, market-oriented, and commercial study of the Global Well Intervention market.
In the primary research process done for this research study, primary sources – industry experts such as Vice Presidents, Marketing Directors, Technology & Innovation Directors and related key executives from various companies and organizations in the global well Intervention market– have been interviewed to obtain and verify critical qualitative and quantitative aspects of this research study.
In the secondary research process for this study, several hundreds of secondary sources such as certified publications, articles from recognized authors, white papers, annual reports of companies, directories, and databases were used to identify and collect information useful for this extensive technical and commercial study of the global market. Secondary research was mainly used to obtain key information about the industry’s value chain, market’s monetary chain, market classification & segmentation according to industry trends to the bottommost level, geographical markets, and key developments from both market and technology oriented perspectives.
A global market breakdown was done and then top-down and bottom-up approaches were used extensively along with several data triangulation methods to perform market estimation and market forecasting for all the segment and sub-segment markets listed in this report. Extensive qualitative and further quantitative analysis was also done for all the estimates arrived at in the complete market engineering process, to list key information throughout the report.
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4.2 CRUDE OIL PRICES: 4.2.1 Short Term Crude Oil Prices There are a number of factors which affect crude oil prices. Refining capacity will play a major role in deciding crude oil prices. If a major refinery develops problems and has to shut down, then the amount of gasoline that can be produced falls. The price of gasoline rises because of shortages, but the price of crude oil will fall because of gluts. In 2014, Israel’s decision to send its military forces to Gaza lent support to oil prices, which bolstered flare ups in the Middle-East, the world’s biggest oil producing region. Investors were also keeping an eye on developments in the Middle East after Israel launched an attack in Gaza, fuelling worries about the oil-rich region. Most recently, in July 2014, oil prices jumped upon hearing the news that a Malaysia Airlines passenger plane went down in Ukraine. Russia is the world’s second biggest crude producer, and there are concerns its standoff with the West over Ukraine could affect supplies. Ukraine is also a major conduit for Russian gas exports to Europe. This could be simply because the investors were worried that the crash could become another potential threat to global crude supplies. Also, unrest in Iraq put upward pressure on crude oil prices in June 2014; pushing North Sea Brent crude oil spot prices to their highest daily level of the year at just over $115/barrel in June 2014. North Sea Brent crude oil spot prices increased from a monthly average of $110/bbl in May to $112/bbl in June. This was the 12th consecutive month in which the average Brent crude oil spot prices ranged between $107/bbl and $112/bbl. The escalating conflict in Iraq continued to record-high levels of Chinese crude oil imports in 2014, and ongoing delays to Libyan oil exports have contributed to upward price pressure. The WTI crude oil spot price increased from an average of $102/bbl in May to $106/bbl in June. Driven in part by the relocation of crude oil to refining centers along the Gulf Coast through new pipelines, crude oil inventory levels at the Cushing, Oklahoma, storage hub, the delivery point for WTI, have fallen by more than half since the start of the year, from 42 million barrels on January 24, 2014 to below 21 million barrels on June 27, 2014, the lowest level since November 2008.
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Price-advantaged crude oil and natural gas feedstocks have encouraged high utilization rates at PADD 3 refineries. Crude oil distillation capacity additions have also supported higher crude runs. All other factors equal, increased refinery crude runs an increase in crude inventories required for operations. The total U.S crude oil production, which averaged 7.4 million barrels per day in 2013, is expected to average 8.5 million barrels per day in 2014 and 9.3 in 2015. 2015 forecasts represent the highest level of production levels since 1972. Growth in domestic production contributed significantly to the fall in petroleum imports per year. The share of U.S domestic energy demand met by imports fell from 60% in 2005 to an average of 33% in 2013. Forecasts suggest that this share percentage is going to decline further to 22% by 2015, contributing significantly to frequent price changes in crude oil and natural gas. Mordor Intelligence expects Brent crude oil prices to average at $110/barrel in 2014 and $105/barrel in 2015. The West Texas Intermediate (WTI) crude oil price discount to Brent is expected to average $9/bbl and $10/bbl in 2014 and 2015, respectively. Figure: Brent Crude Prices – Historic (2000-2013)
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8. CASES OF LOSS OF WELL INTEGRITY Over the past century, the oil and gas industry has made great strides in developing drilling technologies and techniques that make well construction a cost-effective and safe enterprise. However, as new hydrocarbon sources are found in increasingly remote and geologically complex reservoirs, the industry continues to develop technologies to meet well bore integrity challenges, presenting safety hazards and economic risks to the longterm viability of a well. Below are some common cases of loss of well integrity.
8.1 Surface casing failure and drop of well head Surface casing is set to provide blowout protection, isolate water sands, and prevent lost circulation. It also often provides adequate shoe strength to drill into high-pressure transition zones. In deviated wells, surface casing may cover the build section to prevent key seating of the formation during deeper drilling. This string is typically cemented to the surface or to the mud line in offshore wells. Surface casing failure happens as a result when the cooling phase of the top of the well did not contract as expected. Rather, for a period there is no thermal contraction, and then the wellhead will be dropped. A faulty well construction or a casing failure may lead to serious water contamination. To prevent possible contamination to drinking water and the surface, steel pipe is placed in the upper section of the hole. Cement is forced around this casing to form a solid bond between the pipe and the drilled hole. This pipe or casing may go as deep as 1,200 feet. After setting the surface casing, drilling is resumed with a smaller bit until the final desired well depth is reached.
8.3 Loss of Well Bore Lost circulation – the loss of whole drilling mud to the formation – raises significant costs and risks to drillers around the world and threatens to pose greater challenges in the future. The industry is meeting this threat with diverse well bore strengthening materials that work by different mechanisms, but share a common goal: to stop fracture growth and keep drilling mud in the well bore.
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9. AFRICA WELL INTERVENTION DEMAND Sub-Saharan Africa is in the midst of an oil boom as foreign energy companies pour billions of dollars into the region for the exploration and production of petroleum. African governments, in turn, are receiving billions of dollars in revenue from this boom. Oil production in the continent is set to double by the end of the decade and the United States will soon be importing 25% of petroleum from the region. Forecasts suggest that over $50 billion, the largest in African history, will be spent on oil fields by the end of the decade. The new African oil boom centered on the oil rich Atlantic waters of the Gulf of Guinea from Nigeria to Angola is a moment of great opportunity for countries beset by wide-scale poverty. Dramatic development failures that have characterized most other oil dependent countries warn that funds for oil and gas development have not helped developing countries to reduce poverty. Africa’s oil boom comes at a time when foreign aid to Africa from industrialized countries is falling and being replaced by an emphasis from donor nations on trade as a means for African countries to escape poverty. The dominance of oil and mining in Africa’s trade relationships, coupled with this decline in aid flows, means that it is especially vital that Africa make the best use of its oil. Africa Crude Oil Production, Historic and Forecasts Trend to 2020 12
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10.
MAJOR OIL AND GAS COMPANIES
10.1 STATOIL ASA Statoil ASA (Statoil) is a Norway-based integrated energy company primarily engaged in oil and gas exploration and production activities. The Company is an operator on the Norwegian continental shelf, and a license holder in numerous oil and gas fields. It also transports, markets, and trades crude oil, natural gas liquids, and refined products, including methanol and operates, maintains, and develops gasprocessing plants. The Company refines oil and gas at a number of plants both in and outside Norway. The Company is also technical operator for reception facilities, pipelines and infrastructure for gas. Statoil has business operations in 35 countries around the world. Statoil operates oil and gas fields in Australia, Algeria, Angola, Azerbaijan, Brazil, Canada,China, Libya, Nigeria, Russia, United States, and Venezuela, in addition to the Norwegian continental shelf. Statoil has offices that are looking for possible ventures in the countries of Mexico, Qatar and the United Arab Emirates. The company has processing plants in Belgium, Denmark, France, and Germany. In 2006, Statoil was approved to implement the world's largest carbon sequestration project as a means to mitigate carbon emissions to the atmosphere. The company has also recently entered the biofuels sector.
Key Financials The group’s total revenue has decreased to 637.4 NOK billion in 2013, from 722 NOK billion in 2012. Net income from the revenue has shrunk gradually to 39.2 NOK billion in 2013 from 69.5 NOK billion in 2012.
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