GLOBAL WELL INTERVENTION MARKET 2014 - 2019 Market Shares, Forecasts & Trends
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1 INTRODUCTION Technology is setting the scale for another boom in well intervention industry. Until the last few years, the sun had slowly been setting on global oil and gas production except the North America, but the U.S is covering up for the loss in production. Overall the oil production has increased from 77.64 million barrels per day in 2003 to 86.81 million barrels per day in 2013. But things are changing for the better, as increased implementation of long horizontal wells and multi-stage fracturing in tight oil plays across the world-not t mention new constitutional royalty incentives to encourage drilling,, has crude oil and natural gas drilling activity on the upswing. Although natural gas activity is slowed down a bit due to prices, some regions particularly North America is poised to benefit once a price correction occurs. Horizontal drilling activity is increasing every year, opposite to vertical drilling which is decreasing, and by 2022 no. of vertical drilling wells will be reduced to 50% of the current number, which would be offset by increased no. of horizontal wells. As a result of the increased horizontal activity, the world is experiencing an increase in the oil and gas production with the introduction of multi-stage hydraulic fracturing technology. Currently there are more than 5000 subsea wells operating in the world, and many are planned to come online in the coming years. Most of the wells that are operating now are more than a decade old. This is the main reason for the well intervention market to rise rapidly in the recent years. Technology advancement in well intervention has become more necessary to keep up with the rising oil and gas demand. Intervention in to a wellbore may be done for recompletion, work-over, and well control purposes. Some of the new generation deep water facilities do not incorporate the ability to install a drilling rig on the deck, so intervention must be completed with a mobile drilling rig (submersible or drillship) or a specialized intervention vessel. Currently, subsea intervention market is driven by increasing activity and rising subsea well counts. Maintenance costs expected to increase as a result of increasing offshore activity and maturing fields. Intervention to regain control of a well is more complex for subsea wells; there are also significant well control challenges for deepwater in general.
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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 Clinical Data Analytics market. The primary sources are mainly several industry experts from core and related industries and preferred vendors, solution providers, technology developers, alliances, and organizations related to all the segments of this industry’s value chain. All primary sources were interviewed to obtain and verify critical qualitative and quantitative information as well as assess the future prospects.
In the primary research process done for this research study, the primary sources – industry experts such as CEOs, Vice Presidents, Marketing Directors, Technology & Innovation Directors and related key executives from various key companies, organizations in the global enterprise mobility and security market related industries – have been interviewed to obtain and verify both 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.
Total market crackdown was completed 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 from all the numbers arrived at in the complete market engineering process, to list key information throughout the report.
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4 MARKET OVERVIEW
4.1 TYPES 4.1.3 Slickline Often described as the 'workhorse' of well intervention, certainly the cheapest, is robust and relatively simple to conduct and operate. The key factor in slickline is that it can be performed under 'live' well conditions. Equipment required to conduct slickline operations normally consist of:
Alloy or Stainless Steel wireline (piano wire) normally sized 108" diameter or 0.125" diameter
Winch unit capable of holding 25000ft of wire
Diesel or Electric power pack
Well Control Panel
Pressure control Equipment comprising - Lubricator / Stuffing Box / BOPS / Riser
Tool house holding downhole tools & running equipment
Applications: Slickline can be used to run, set and recover various tools, plugs, packers, valves to the well bore in order to perform:
Repair work - change-out faulty safety valves / gas lift valves
Surveillance - conduct pressure / temperature surveys, downhole camera diagnostics
Isolation: Plug off water zones, hydrocarbon or gas zones, prepare well for workover
Manipulation work: Open sliding sleeve assemblies, clear blockages, cut and remove wax build up
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4.1.4 Braided line Adapted as a form of "heavy duty" wireline service , braided cable can be used to deploy heavy toolstrings and particularly in well fishing operations where large impact forces can be applied to stuck toolstrings, plugs or flow control devices.
Equipment:
The equipment used is the same as electric line operations.
Applications: The main application for braided line operations include: 
Fishing - Where large impact forces are required to free stuck equipment

Heavy Duty Operations - Deployment of large & heavy toolstrings or downhole equipment
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4.2 CRUDE OIL PRICES: 4.2.1
Short Term Crude Oil Prices
There are 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 in 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 worried that the crash could become another potential threat to global crude supplies. Year
Crude Oil Price ($ per barrel)
2000
28.5
2001
XX
2002
25.02
2003
XX
2004
38.27
2005
XX
2006
XX
2007
72.39
2008
97.26
2009
XX
2010
79.5
2011
XX
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2012
111.67
2013
XX
4.2.2 Long Term Oil Prices Forecast Oil prices are represented by spot prices for North Sea Brent crude. Prices decline in the Reference case from $112/barrel in 2012 to about $109/barrel in 2025 and then rise slowly to $130/barrel in 2035 and $141/barrel in 2040. The North Sea Brent crude oil price is tracked as the main benchmark for world oil prices, because it reflects the marginal price paid by refineries for imported light, sweet crude oil (used to produce petroleum products for consumers) better than does the West Texas Intermediate (WTI) crude oil price. The WTI price continued to trade at a discount relative to other world oil prices in 2013. The discount narrowed through the end of the summer, as a result of new U.S. oil transportation infrastructure out of the market center for WTI prices in Cushing, Oklahoma, and refineries running at record levels. In 2012, the WTI and North Sea Brent prices differed by $18/barrel. In the EIA’s annual energy outlook 2014 Reference case, the gap closes to $2/barrel in 2020 and remains at that level throughout the projection period, following resolution of most of the transportation system constraints in the United States. In each of the other outlooks in the comparison, oil spot prices are based on either North Sea Brent or WTI prices, with the exception of IEA spot prices, which are based on the international average of crude oil import prices within the member countries of the Organization for Economic Cooperation and Development (OECD). Long Term Oil Prices Trend
$
WTI
Brent 2012
WTI
Brent 2025
WTI
Brent 2035
EIA-AEO 2014 (Reference Case)
WTI
Brent 2040
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5. GLOBAL CRUDE OIL MARKET SCENARIO The global oil consumption in 2013 has been increased by 1.4% or 1.4 million barrels per day to 91.33 million barrels per day, compared to 89.93 million barrels in per day in 2012. Majority of the consumption is from the countries outside the OPEC and they accounted for 51% of total world consumption. Also these countries are majorly responsible for the growth in consumption. The US accounted for largest rise in consumption overtaking Chinese consumption. The US’ oil consumption rose to 18.8 million barrels per day in 2013 from 18.49 million barrel per day in 2012. Global Oil Production Share by Region - 2013
South & Central America
Global oil production, after decreasing in 2009, rose to a new all time high of 86.8 million barrels per day, a rise of 0.6% compared to 86.25 million barrels per day in 2012. Production did not grow in line with the demand. The US recorded the highest growth in production in 2013, by achieving 13.5% rise in production levels. Production volume from the Europe, Middle East and APAC decreased significantly in 2013, but the overall production levels rose as a result of a high rise in US oil production. The main reason behind the US’ rapid growth in oil production could be shale development. Libya experienced a huge dip in the oil production compared to 2012, mainly because of military actions happening in the
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country. Libya produced only 0.9 million barrels per day in 2013 down from 1.5 million barrels per day in 2012.
7. DRIVERS & CONSTRAINTS 7.1 DRIVERS 7.1.1 Increasing Deep Water Activity As traditional onshore reserves are depleted, offshore resources are playing a greater role in supplying the growing demand. The growing interest in shelf resources is illustrated by the fact that over the last 20 years the number of large shelf discoveries has been greater than the number of big onshore discoveries.
7.2 CONSTRAINTS 7.2.2 Environmental Issues There are also concerns regarding environmental safety of well intervention. When hydraulic fracturing is underway at a shallow depth, it is possible that companies may inject chemical reagents into the ground waters. There may also be problems with the disposal of used chemical solutions. Sometimes well intervention is associated with the emission of methane and other dangerous compounds in to the atmosphere. Some experts express concern that the use of hydraulic fracturing may lead to rock movement and deformation and this in turn, can provoke landslides and restrict construction. Shale oil production requires the use of large quantities of water. Hydraulic fracturing requires 5-19 million liters of water. This may become impediment in certain production regions.
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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 that presents safety hazards and economic risks to the long term viability of a well. Below are some common cases of loss of well integrity
8.2 Production casing hanger failure Casing hanger is a portion of wellhead assembly which provides support for the casing string when it is lowered into the well bore. The possible occurrences of casing failure can be pressure testing fail, slipping through the well head, excessive plastic deformation. Axial overload could be one of the root causes in casing hanger failure. Tubing hanger may also fail during misalignment during installation, which leads to uneven loading of the lock down bolts. There is also a possible risk of explosion if proper safety measurements have not been followed. This, ultimately results in well explosion or permanent closure.
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 the drilling mud in the well bore.
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9. GLOBAL WELL INTERVENTION MARKET OUTLOOK Well intervention is carried out to extend the life of the producing wells by improving performance or providing access to stranded additional hydrocarbon reserves. A great deal of engineering expertise is being applied these days to well intervention. Keeping wells producing is an admirable and necessary goal. Often, despite the best efforts and maximum use of technology, an intervention must be performed to restore a well to full production.
Pros and Cons of Riser-Less Well Intervention Pros Lightest most cost effective and flexible intervention setup for electric-line
Cons Limited number of SSL systems worldwide
Can be deployed from Vessel of Opportunity
Cannot pump large volumes of fluid
Fast to mobilize, deploy & move between wells
Cannot run Coil Tubing
Can achieve 90% of intervention requirements on e-line with Welltec mechanic suite of tools Vessel can be used for additional activities (IMR, Construction, Installation, SAT etc)
Oil Companies not all locally aware of technology
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9.1 North America Well Intervention Demand
9.1.3 GULF OF MEXICO The Gulf of Mexico has been left for dead more than once over the past half-century. It’s now roaring back to life with at least 10 recent mega-discoveries that have renewed oil explorers’ enthusiasm for the region. Billions of dollars are being poured into new wells in the ultra-deep waters off Texas and Louisiana, fueling a resurrection that could set a production record this decade and complete a recovery from the worst offshore oil spill in U.S. history. The deep water of the Gulf of Mexico has emerged as a world class oil and gas frontier in the last few years. Leasing, exploration and production activity is accelerated rapidly since the arrival of deep water of Gulf of Mexico as America’s new frontier in 1997. Gulf of Mexico federal offshore oil production accounts for 23 percent of total U.S. crude oil production and federal offshore natural gas production in the Gulf accounts for 7 percent of total U.S. dry production. Over 40 percent of total U.S. petroleum refining capacity is located along the Gulf coast, as well as 30 percent of total U.S. natural gas processing plant capacity. Gulf of Mexico Well Intervention Market
2013
2014
2015
2016
2017
2018
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9.6 ASIA PACIFIC With an unparalleled range of geographies, economic conditions and political systems, the countries of the AsiaPacific region offer some of the most diverse markets to the world. The economic growth in the Asia/Pacific region, particularly India and China, has made a dependable energy supply sufficient to meet the increasing demand critical to maintaining the expansion. For international contractors serving the energy industry, AsiaPacific is a region that presents enormous opportunities, but the risks associated with these opportunities are substantial. Success in the area often depends on reducing the risks to manageable levels by maintaining a local presence and by drawing upon the technical and financial resources. The region encompasses a few countries with well-developed industrialized economies – Japan, Australia and New Zealand – and many countries with emerging economies. While there are considerable oil and natural gas resources in the region, particularly in India, Indonesia, Malaysia, China and offshore Western Australia, long-term energy demand growth is expected to surpass its own production capacity. The countries in the region are expected to be dominant consumers of world energy supplies eventually. Natural gas consumption is expected to increase throughout the region in the coming years. In the industrialized countries such as Japan, Australia and New Zealand, natural gas consumption is expected to reach 6.0 tcf by 2025, with an annual average increase of 1.8 percent. While in developing Asia natural gas consumption is expected to grow at a rate of 3.5 percent per year, with China and India will be setting the pace as the region’s fastest growing energy consumers. Demand for petro chemicals is also growing rapidly in the developing countries of Asia, since the petro chemical market tends to emulate GDP growth. Responding to the growing demand for energy in the region, international and state-owned companies have invested in the development of technically complex, world-scale facilities in the region. These actions are helping the well intervention market gaining a strong foot hold in the Asia-Pacific region. In the Asia-Pacific region, the largest change in proved reserves occurred in China, based on new information from the country's land and resource ministry. Boosted by technological advancements, proved oil reserves in China exceeded 24 billion bbl, up 659 million bbl from last year. Gas reserves climbed 10% to 155 tcf.
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Asia Pacific Crude Oil Production Trend to 2020
Crude Oil Production (Million Barrels per day)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2020
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10. COMPANY PROFILES 10.2 ROYAL DUTCH SHELL PLC Company Overview: Royal Dutch Shell Plc, commonly known as Shell, is an Anglo-Dutch multi-national oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom. The company operates in three segments upstream, corporate and downstream. The company is incorporated in 2002, as a merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading. It is the second largest company in the world in terms of revenue and is one of the majors of the oil and gas industry. Business Description: The company operates in three business segments, upstream, downstream and corporate. Upstream International manages the upstream businesses outside the Americas. It searches for and recovers crude oil and natural gas, liquefies and transports gas, and operates the upstream and midstream infrastructure necessary to deliver oil and gas to market. Upstream International also manages Shell’s entire liquefied petroleum gas (LNG) business, gas to liquids (GTL) and the wind business in Europe. Its activities are organized primarily within geographical units, although there are some activities that are managed across the businesses or provided through support units. Upstream Americas manages the upstream businesses in North and South America. It searches for and recovers crude oil and natural gas, transports gas and operates the upstream and midstream infrastructure necessary to deliver oil and gas to market. Upstream Americas also extracts bitumen from oil sands that is converted into synthetic crude oil. Additionally, it manages the United States-based wind business. It comprises operations organized into business-wide managed activities and supporting activities. Projects and Technology manages the delivery of Shell’s major projects and drives the research and innovation to create technology solutions. It provides technical services and technology capability covering both Upstream and Downstream activities. It is also responsible for providing functional leadership across Shell in the areas of health, safety and environment, and contracting and procurement.
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Key Financials: In 2013, the company gained total revenues of $451,235 million compared to $467,153 million in 2012. Whereas the total earnings of the company has been reduced to $16,879 million in 2013 from $27,423 million in 2012.
Royal Dutch Shell Plc, Revenue by Geography ($ million)
Asia, Oceania, Africa
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