GLOBAL SLICKLINE SERVICES MARKET 2014 - 2020 Market Shares, Forecasts & Trends
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RESEARCH METHODOLOGY The research methodology can be summarized in the following sequence:
1) Secondary Research: Information collected from a number of public and paid data sources. Public databases, company annual reports (if any), white papers and research publications by recognized oil and gas industry experts have been utilized. Paid data sources include authentic energy databases. 2) Primary Research: After collecting data from secondary sources, primary interviews were conducted with stakeholders at different points of the value chain like manufacturers, end users and key opinion leaders of the sector in the world. Primary research was used both to validate the data points obtained from secondary research and to fill the data gaps after secondary research. 3) Market Engineering: The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates. 4) Expert Validation: The market engineered data is verified and validated by a number of experts, both in-house and external. 5) Report Writing: After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.
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4. MARKET OVERVIEW 4.1 DRIVERS 4.1.3 INCREASING EXPLORATION ACTIVITY Oil and gas exploration is one of the core activities of the oil and gas industry. Countries seek to increase their reserves and develop production in order to meet the increasing demand for energy. There were some difficulties with operating in tougher environmental conditions, especially deeper waters in some regions such as the North Sea and Gulf of Mexico. Global spending on exploration and production activities has increased by 5 percent (18 billion) in 2013, while spending on property acquisition fell by $17 billion. Total upstream spending by the top 40 oil and gas companies was relatively flat in 2013 (+0.4%), compared to strong growth from 2000 to 2012 (averaging 11 per cent per year). The dramatic increase in drilling activity across the globe has boosted every 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.
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Production includes costs associated with extracting oil and natural gas from the ground once the field 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 increasing the slickline services demand globally.
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6 GLOBAL SLICKLINE SERVICES MARKET ANALYSIS, BY GEOGRAPHY 6.1 NORTH AMERICA North America’s slickline services market is expected to reach $XX billion by 2020, up from $XX billion in 2013, with a CAGR of XX per cent. Figure 15: North America Slickline Services Market Share by Country
United States
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Canada
Gulf of Mexico
North America is expected to lead the global slickline services market in the coming decade, as a result of increasing shale activity and growing number of wells both in onshore and offshore areas. The vast majority of the wells drilled in the region’s unconventional plays are horizontal. At some point, most of these wells require artificial lift to produce hydrocarbons and/or dewater the gas wells, but artificial lift in horizontal wells is still an evolving science. Applying artificial lift particularly in shale assets is challenging, as the wells are often deep with long horizontal sections. Significance of usage of artificial lift in North America is prominent. With more than half the natural gas produced in the US is expected to come from horizontal well by 2030, including very tight sands and shales, the market is expected to grow rapidly in the coming decade.
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Several methods of artificial lift systems have been incorporated in the region, including rod pumps, electric submersible pumps and gas lifts. Depending on the application and geology, some have proved more successful than the others. Most of these lift systems are proven to produce from vertical and deviated wells. Now the companies are trying to extend the lessons learned from the experiences to produce oil and gas from horizontal wells. Increased investment in exploration and production would support hundreds of thousands of new careers and provide billions of dollars in wages and tax revenues. Increased production is likely to contribute an additional GDP in immediate new economic activity each year. This magnitude of economic growth is expected to contribute federal and state and local tax revenue from production equivalent to approximately $350 per person over the age of eighteen per year over a similar time horizon. Currently in the U.S., oil and natural gas production in offshore areas is limited to only few regions. It is actually produced off the coast of six U.S. states, Alabama, Louisiana, Mississippi, Texas, California and Alaska. Offshore oil and gas production has a significant impact on local onshore economies as well as national economy. Figure 16: Global Slickline Services Market Demand Trend 14 12
$ billion
10
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8 6 4 2 0 2010
2011
2012
2013
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2014
2015
2016
2017
2018
2019
2020
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Table 8: Global Slickline Services Market Demand Year
Market Demand (in $ billions)
2010
XX
2011
XX
2012
5.71
2013
XX
2014
XX
2015
XX
2016
XX
2017
9.25
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
XX
XX
XX
XX
Income from Continuing Operations
4,516
Schlumberger Financial Performance by Groups ($ millions) Oil Field Services
Reservoir Characterization Drilling Production Eliminations & Other Total
2013
Column1
2012
Column2
Revenue
Income Before Taxes
Revenue
Income Before Taxes
XX
XX
XX
XX
XX
14,802
XX
12,246
XX
3,309
XX
XX
XX
XX
XX
XX
XX
45,266
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-68 XX
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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
XX
XX
XX
Latin America
XX
1,589
XX
XX
XX
XX
11,444
XX
XX
XX
XX
XX
XX
XX
XX
XX
Europe/CIS/Africa Middle East & Asia Eliminations & Other
442
Total
XX
Global Slickline Services Market | Sample
9,344
1,921
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