AUSTRALIA WIRELINE LOGGING SERVICES MARKET 2014 - 2020 Market Shares, Forecasts & Trends
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TABLE OF CONTENTS 1. Introduction
1
1.1 Report Guidance
2
1.2 Markets Covered
3
1.3 Key Points Noted
4
2. Executive Summary
5
3. Market Overview
6
3.1 Introduction
6
3.2 Recent Developments in Wireline Logging Services
7
3.3 R & D Activities
8
3.4 Investments and Opportunities
10
4. Drivers, Constraints and Opportunities 4.1 Drivers
12 12
4.1.1 Increasing Energy Demand
12
4.1.2 Shale Boom
13
4.1.3 Increasing Exploration Activity
14
4.1.4 High Demand for Logging
15
4.2 Constraints
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4.2.1 Environmental Issues
16
4.2.2 Lack of Skilled Labor
17
4.2.3 Constitutional Barriers
18
4.3 Opportunities
19
4.3.1 Investment Opportunities in Wireline Logging Services Market
19
4.3.2 Increasing Drilling Activity Across the Globe
20
5. Wireline Logging Services Value Chain Analysis
21
5.1 Overview
21
5.2 Equipment Manufacturers
23
5.3 Service Providers
24
5.4 Operators
25
6. Australia Wireline Logging Services Market Analysis, by Type
27
6.1 Introduction
27
6.2 Open-Hole
28
6.2.1 Market Definition
29
6.2.2 Market Analysis and Forecasts
30
6.3 Cased-Hole
35
6.3.1 Market Definition
35
6.3.2 Market Analysis and Forecasts
36
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7. Australia Wireline Logging Services Market Analysis, by Wireline Type
41
7.1 Introduction
41
7.2 E-Line
42
7.2.1 Market Definition
43
7.2.2 Market Analysis and Forecasts
44
7.3 Slick-Line
49
7.3.1 Market Definition
49
7.3.2 Market Analysis and Forecasts
50
8. Competition
56
8.1 Overview
56
8.2 Market Share of Key Companies, by Geography
57
8.3 Market Share of Key Companies, by Equipment
60
9. Key Company Analysis
64
9.1 Baker Hughes Inc
64
9.2 Schlumberger Limited
69
9.3 Halliburton Company
75
9.4 Nabors Industries Ltd
79
9.5 Weatherford International
81
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9.6 Superior Energy Services, Inc
86
9.7 OilServ
88
9.8 National Drilling Company
90
9.9 RECON Petrotechnologies Ltd
92
9.10 Pioneer Energy Services
95
10. Competitive Landscape 10.1 Deal Summary
97 97
10.1.1 Acquisition
98
10.1.2 Private Equity
99
10.1.3 Equity Offerings
100
10.1.4 Debt Offerings
101
10.1.5 Partnerships
102
10.1.6 Asset Transactions
103
10.2 Recent Developments
104
10.2.1 New Technology Inventions
104
10.2.2 New Contract Announcements
105
11. Appendix
106
11.1 Sources
106
11.2 Abbreviations
107
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11.3 Market Definition
108
11.3.1 Methodology
109
11.3.2 Coverage
110
11.3.3 Secondary Research
111
11.3.4 Primary Research
112
11.3.5 Expert Panel Validation
113
11.4 Contact Us
114
11.5 Disclaimer
115
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4. DRIVERS, CONTRAINTS AND OPPORTUNITIES 4.1 DRIVERS 4.1.3 INCREASING EXPLORATION ACTIVITY Exploration is one of the core activities of the oil and gas industry globally. Although there have been some difficulties with operating in tougher environmental conditions in deeper waters in some regions, spending on exploration activities in Australia has been on the rise over the past five years. While total spending on property acquisition continued to fluctuate. Total upstream spending by top companies in Australia is relatively flat in the last five years, compared to strong growth shown between 1995 and 2005. The dramatic increase in drilling activity across Australia between 1990 and 2000 has boosted country’s economy and job growth significantly. Oil companies are not only eager to drill onshore/offshore fields but also enthusiastic about creating jobs and bringing more oil to the world. This will help lower the oil and gas prices. Increased offshore investment and production would support hundreds of new jobs and provide billions of dollars in new wages and tax revenues. Upstream expenditures for oil and gas production can be divided into three categories: Property acquisition, exploration & development, and production. exploration and development includes expenditures related to searching and developing the facilities and infrastructure to produce reserves. Production includes costs associated with extracting oil and natural gas from the ground once the field
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has been developed. Property acquisition includes costs incurred to purchase proved and unproved oil and natural gas reserves. Acquisition expenditures may fluctuate, spiking when there are large mergers and acquisitions. For example, after ExxonMobil’s acquisition of XTO in 2010, acquisition expenditures had surged to very high levels and later it declined by 2013. Flat oil prices, decreasing reserves, increasing energy demand are encouraging oil and gas companies to invest more in exploration and production activities thereby boosting the wireline logging services demand in the country. However, with the number of exploration wells being spudded decreasing since the past decade, the Wireline logging services market in the country is expected to witness fluctuations in market demand in the next decade. Mordor Intelligence estimates, that the decreasing exploration activity in Australia is expected to be compensated to some extent by increasing drilling activity in terms of water depths, both in onshore unconventional wells and offshore wells. This extensive drilling activity is expected to reduce the fluctuations gap in market demand.
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6 AUSTRALIA WIRELINE LOGGING SERVICES MARKET ANALYSIS The recent growth in Australia’s energy consumption has been lower than the average of the last five years at 2% compared to 2.7% but still the energy consumption has been increasing. The primary energy consumption in Australia in 2013-14 was Petroleum which accounted for 62% of the total energy consumption. The consumption of petroleum is estimated to increase to 80% by 2049-50. Table 7: Production of Petroleum Liquids by State (in million barrels) Crude
Condensate
LPG
2012
2013
2012
2013
2012
2013
New South Wales
-
-
-
-
-
-
Northern Territory
2.5
1.8
-
-
-
-
Queensland
5
5
1.7
1.6
2.4
2.2
South Australia
3.7
7.2
0.1
1.3
-
-
Tasmania
-
-
0.1
0.6
0.1
0.6
Victoria
11.8
9.3
7.8
7.8
10.3
10.9
Western Australia
63.7
44.6
39.3
36.6
9.4
7.9
Total
86.7
67.9
49
47.9
22.1
21.6
Australia has significant quantities of discovered gas resources, many of which remain undeveloped. So, decent market opportunity exists to develop new gas projects, including for residential and commercial use, domestic gas processing industries and export sales.
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Figure 13: Number of Exploration Wells Spudded In Australia
DATA HIDDEN FROM VIEW
The number of exploration wells spudded in the country continues to fluctuate in the recent years, and is in the downward trend compared to 2001 levels. However, the number of offshore wells has been halved in the past decade and the number of onshore wells continues to fluctuate following downward trend. The level of exploration activity in the country is increasing in terms of water depths, the major reason behind this could be the operators trying to find new oil and gas resources in much deeper waters and tougher environmental conditions.
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Figure 14: Australia – Exploration Drilling Activity Trend (000s Meters)
DATA HIDDEN FROM VIEW
Australia’s Wireline logging services market is expected to increase from 2013 levels, though fluctuating; it is expected to follow the constant trend. The major reasons behind these fluctuations could be the decreasing exploration activity and decreasing number of wells being drilled every year. But the increasing water depths being drilled every year is giving some hope to Wireline logging services market. Australia has various factors affecting the Wireline logging services market in the country, some of them are taxes, charges and fees oil and gas companies pay to government. When it comes to petroleum related activities Australia pays a variety of taxes. It is estimated that on an average, taxes and fees accounts for just under half of the industry’s overall level of pre-tax profit. Total taxes have been amounted to approximately $8 billion in the last five years, with company taxes estimated to account for slightly more than half of the actual total amount. Companies traditionally invested more than the actual level of profits in Australia. The country’s oil and gas industry has spent more than twice the capital investment in the past decade over cumulative profits.
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Figure 15: Australia Wireline Logging Services Market Demand
DATA HIDDEN FROM VIEW
Table 17: Australia Wireline Logging Services Market Demand to 2020 Year
Market Demand
2010
XX
2011
XX
2012
0.16
2013
XX
2014
0.19
2015
XX
2016
XX
2017
0.21
2018
XX
2019
XX
2020
XX
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9 KEY COMPANY ANALYSIS 9.2 SCHLUMBERGER LTD. COMPANY OVERVIEW Schlumberger Limited is the world's largest oilfield services company. The company operates in more than 80 countries and employs nearly 1,30,000 people. Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management and information solutions to oil and gas exploration and production industries worldwide. The company was founded in 1926 and its principal offices are located in Paris, Houston, London and The Hague. BUSINESS DESCRIPTION Schlumberger operates through three groups: Reservoir characterization, drilling and production. The Reservoir Characterization group provides reservoir imaging, monitoring, and development services; wireline technology that offers open-hole and cased-hole services; exploration and production pressure and flow-rate measurement services; information solutions, such as software, consulting, information management, and IT infrastructure services that support oil and gas industry; data interpretation and integration services; consulting services; and industry petrotechnical training solutions. The Drilling group designs, manufactures, and markets roller cone and fixed cutter drill bits, and drilling fluid systems; geo services; supplies engineering support, directional-drilling, measurement-whiledrilling, and logging-while-drilling services; provides bottom hole assembly drilling tools, borehole enlargement technologies, impact tools, and tubulars and tubular services; and dynamic pressure management solutions. The Production group provides well services comprising pressure pumping, well cementing, stimulation, and intervention; well completion services and equipment, such as packers, safety valves, and sand control technology; artificial lift; coiled tubing equipment and services; slickline services for downhole
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mechanical well intervention, reservoir monitoring, and downhole data acquisition; subsea solutions; and geological storage solutions, including storage site characterization for carbon dioxide, as well as engages in the development, management, and environmental protection of water resources. KEY FINANCIALS Full year 2013 revenue of $45.27 billion increased 8 percent versus the same period last year with international revenue 11 percent higher and North America revenue increasing 3 per cent. Internationally, higher exploration and development activities in a number of geomarkets, both offshore and onshore markets, contributed to the increase. The increase was led by the Middle East and Asia which increased 23 per cent, mainly from robust results across a diversified portfolio of projects and activities in Saudi Arabia, Iraq and UAE: increased seismic surveys across Asia, and sustained land and offshore drilling activity in Australia and China geo markets. Europe/CIS/Africa revenue increased 8 per cent, led by the Russia and central Asia region on strong land activity in central Siberia and robust offshore projects in Sakhalin. The Sub-Saharan region increased on strong development, exploration and seismic activities as well. Latin America was increased by 3 per cent, mainly due to solid progress on an SPM project in Ecuador and strong IPM results in Argentina. North America growth is driven by increased offshore revenue as a result of higher drilling and exploration activities. This increase was largely offset by a decline in land as a result of reduction in rig count and pricing weakness in the areas of drilling, stimulation and wireline, although the pricing trend slowed down during the second and third quarters. Full year 2013 pretax operating income of $9.34 billion increased 15 per cent versus the same period last year as international pretax operating income of $6.88 billion increased 24 per cent, while North America pretax operating income of $2.7 billion was flat.
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Schlumberger Financial Performance ($ millions) Financial Performance
2013
2012
2011
Revenue
45,266
41,731
36,579
Income from Continuing Operations
6,801
5,230
4,516
Schlumberger Financial Performance by Groups ($ millions) Oil Field Services
2013
Column1
2012
Column2
Revenue
Income Before Taxes
Revenue
Income Before Taxes
12,246
3,647
11,159
3,069
Drilling
17,317
3,309
15,892
2,789
Production
15,927
2,619
14,802
2,327
Eliminations & Other
-224
-231
-122
-68
Total
45,266
9,344
41,731
8,117
Reservoir Characterization
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Schlumberger Financial Performance by Geography ($ millions) By Geography
2013
Column1
2012
Column2
Oil Field Services
Revenue
Income Before Taxes
Revenue
Income Before Taxes
North America
13,897
2,735
13,535
2,737
Latin America
7,751
1,589
7,554
1,387
Europe/CIS/Africa
12,366
2,589
11,444
2,245
Middle East & Asia
10,810
2,700
8,775
1,921
Eliminations & Other
442
-269
423
-173
Total
45,266
9,344
41,731
8,117
ANALYST VIEW Schlumberger is an organization with global presence. The company helps oil and gas operators in providing the accuracy and comprehensive scope needed to correctly determine the petro physical properties of the reservoir and its fluid contents. From its operations in Australia, the company’s Wireline logging services market share in the country is expected to hit XX per cent mark by 2020. However fluctuations in the country’s Wireline logging services market could also affect the company’s market share in the coming decade. The company is planning to develop new technologies that will help reduce both cost and time of operators. The five per cent growth in revenues in the first quarter of 2014, compared to 2013 is mainly due to further growth in key markets such as Australia and Saudi Arabia. Robust drilling activity and technology uptake in Australia helping the company increase its revenue from Australian operations.
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In addition, the company is very active in signing new contracts. In Australia, Schlumberger Completions has been awarded a contract worth $40 million by INPEX. The contract covers the upper and intermediate completions for the first 20 wells in Phase I of the upcoming Ichthys development. Based on all these, Mordor Intelligence estimates the company is expected to show decent growth in Wireline logging services market in the coming decade.
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