The global upstream services market is going to be positive during the forecast period as oil producing countries are again investing in new projects due to rise in oil prices, which is being reflected in the high revenue of the service providers. The Middle East alone has a projected CAGR of ~ 6.0% for the forecast period. Mergers & Acquisitions would help stablilize the volatile environment so that service providers can manage their debts and survive in market. At country level, governments are also creating favorable policies, and are making heavy investments so that private ventures and public companies fulfil the nations’ energy demand, mutually.
In 2017, the market has been ramping up to a spur in new offshore services, higher oil prices have given confidence to the operators for the exploration and production activities. Hence, the market would grow during the forecast period. The world oil and gas equipment market estimated to go up from USD 180 billion in 2018 to USD 225 billion in 2019.
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Onshore and offshore are the two segments from the well type services market, the onshore application segment is expected to dominate the market during the forecast period and will continue to do so. Regionally, within North America, Canada and U.S. will have greater potential from tight gas, shale sands, natural gas exploration as they have recently discovered new fields. North America is followed by Asia Pacific, which would also have a profitable market by 2023. As, the region is witnessing huge recent discoveries, with maximum number of rigs, increased demand for petrochemical, exploration of ultra-deep resources. Urbanization in countries such as India, and China raise the demand for upstream services.
Upstream Services Global Market – Overview
The oil & gas industry operates in three main sectors, namely, upstream, midstream, and downstream. The upstream sector, which is majorly associated with the exploration and production of oil and natural gas, utilises numerous services across different operations, spanning from searching for oil and gas to drilling wells, and operating them. The process, in itself, is very bulky and requires heavy machinery and specialised services for the complete process. As per the study conducted by Market Research Future, the global market for upstream services is likely to grow at the CAGR of around 4%.
Oil & Gas industry is one of the major revenue generating industries which has pushed the market for exploration and production activities, where, upstream services methods is one of them. In other words, the growth in the oil & gas industry will create a positive impact on the market for global upstream services. Reviving fossil fuel demand is expected to result in a rise in demand for the Upstream Services market. The oil and gas industry has been experiencing severe revenue contraction post April 2014, following oil price decline. Persistent price downfall had a profound impact on the investments in the oil & gas industry, particularly the upstream sector. However, recent adjustments the oil prices have instigated a positive outlook for this industry. Changes in demand-supply dynamics is expected to induce a rise in the number of oil wells, thereby driving the upstream services market. Increasing demand for oil and gas is also expected to fuel the demand in the upstream services market.
Owing to the effects of various macro- and micro-economic factors, the upstream oil & gas services market has experienced significant changes over the past several months. Factors, such as shale gas production in North America, oversupply of crude oil from OPEC countries, economic slowdown in China, etc. resulted in anomalies in global crude oil demand and supply dynamics; and consequently led to a sharp decline in crude oil prices. This led to a severe downturn in the global upstream oil & gas services market and companies operating in this segment experienced a huge drop in their revenue collection. Following the global trend, current state of the APAC upstream oil & gas service industry remains volatile.
Geographically, the global upstream services market has been divided into North America, Europe, Asia Pacific and Rest of the World. Among these, North America is currently leading this market with their shale gas revolution boosting the market. Asia-pacific regions accounts for a considerable portion of oil and gas demand and is expected to have a significant impact on the growth & development in the upstream services market.
In June 2017 – Nigerian National Petroleum Corporation (NNPC), FIRST Exploration & Production (First E&P) and Schlumberger signed a tripartite agreement for development of the Anyala and Madu fields under OML 83 and OML 85, offshore Nigeria.
In March 2017 – Houston-based Halliburton Co. (NYSE: HAL) plans to have hired more than 2,000 U.S. oil field workers by the end of the first quarter. The hiring is in support of a sharp increase in demand for oil field services as the upstream sector builds momentum on what many assume is the end of the persistent oil downturn.
In January 2017 – Halliburton (NYSE: HAL) announced it has signed a contract with Shell Iraq Petroleum Development to provide drilling services for sustained production at Shell’s Majnoon Oil Field in Southern Iraq. Under the contract Halliburton will mobilize three rigs to drill development wells and carry out work over activities over the next two years.
In October, 2016 – GE (NYSE:GE) and Baker Hughes (NYSE: BHI) announced that the companies have entered into an agreement to combine GE’s oil and gas business (“GE Oil & Gas”) and Baker Hughes to create a world-leading oilfield technology provider with a unique mix of service and equipment capabilities.
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Upstream Services Global Market – Segmentation
The scope of global upstream services market is segmented into two major segments which are explained below:
By Well Type
Upstream Services Global Market – Competitive Analysis
The global market for upstream services is one of the most technological advance market. To maintain the market position and to drive the market growth, all the major players continuously strive for technological development in their upstream services systems. Market leaders are rigorously involved in R&D activities, so as to develop feasible product, which fulfils all the client requirement over their upstream operations.
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