Oil Well Cement Market Research Report – Global Forecast till 2025
Oil well cement is used in the oil & gas industry for the cementing operation in the oil wellbores under high temperature and high pressure. The primary objectives of the cementing are supporting and holding casings, preventing corrosion of casings, and providing zonal isolation in the oil well. Such cement is used for cementing both onshore and offshore oil wells. Moreover, the strength of the oil well cement depends on various factors such as slurry design and the use of additives.
The growing Exploration & production of unconventional reserves and increasing drilling activities in Asia-Pacific are expected to drive the market for oil well cement during the forecast period. The increasing global energy demand is leading to the depletion of conventional oil and gas reserves, resulting in the focus on E&P of shale oil and other unconventional resources. As per the US Energy Information Administration (EIA), global natural gas production from shale resources accounted for 42 billion cubic feet per day (Bcf/d) in 2015 and is expected to reach 168 Bcf/d by 2040. Moreover, shale gas production is expected to hold nearly 30% of the world’s total natural gas production share by 2040. For the various countries planning emission reduction, the use of shale fuel is an opportunity to ensure energy security while reducing dependence on conventional fuels. Several key countries are considering increasing investments in E&P for natural gas from shale resources to support the export requirement to bridge the demand and supply gap of electricity. For instance, countries such as the US, Canada, China, Argentina, Mexico, and Algeria are projected to account for 70% out of the global shale production by 2040. In the US, oil and gas companies aim to increase shale production from 37 Bcf/d in 2015 to 79 Bcf/d by the year 2040. Thus, the growing shale production, especially in Argentina, China, and Mexico, is expected to increase the demand for oil well cement, which is used for cementing offshore and onshore wells during hydraulic fracturing and horizontal drilling activities. The E&P of unconventional reserves of tight and shale gas are expected to create the need for oil well cementing.
Moreover, as per the report mentioned above, the use of natural gas for electricity generation in Asia-Pacific grew from 1,442.1 Terawatt-hour (TWh) in 2017 to 1,485.8 TWh in 2018. The production of oil and gas is expected to increase during the forecast period to meet the energy demand in the region. The increase in the production of oil and gas due to the high demand has led to a rise in drilling activities in Asia-Pacific. Many oil and gas companies such as Saudi Aramco (Saudi Arabia) and Halliburton (US) focus on oil and gas exploration & production, which adds to the drilling in Asia-Pacific. For instance, in February 2019, Jadestone Energy Inc (Singapore) signed a rig contract for infill drilling on the stag oilfield at offshore Australia. According to the India Brand Equity Foundation (IBEF), in India, the growing oil & gas industry is expected to attract investments for E&P worth approximately USD 25 billion by 2022. Additionally, according to the World Oil Magazine published in March 2019, China’s oil-producing companies, namely, PetroChina, Sinopec, and China National Offshore Oil Corp. (CNOOC) planned to invest USD 77 billion to boost the drilling activities in the existing oil fields. Such developments are expected to increase in demand for oil well cement used for cementing work during drilling. Furthermore, as per the October 2019 data of Baker Hughes, a GE Company (US), the rig count in Asia-Pacific increased from 2410 rig counts in 2017 to 2628 rig counts in 2018, leading to an increase in the need for oil well cement in drilling activities. Hence, these factors are expected to drive the growth of the global oil well cement market during the forecast period.
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The global market for oil well cement is segmented based on product, application, and region. By product, the global market is segmented as Class A, Class G, Class H, and others. By application, the global market is segmented as onshore and offshore. The Class G segment is projected to be the largest segment owing to its wide application with retarders and accelerators. Moreover, this segment is expected to grow at the fastest rate as Class G oil well cement can be used for oil wells with a variable depth range of 8,000 ft.
In terms of region, the market is segmented as North America, Europe, Asia-Pacific, the Middle East & Africa, and South America. North America dominates the global oil well cement market. The increasing per capita energy consumption and exploration & production of oil and gas are expected to drive the oil well cement market in the region.
According to the BP Statistical Review of World Energy report, 2019, the primary energy consumption per capita of North America increased to 239.8 GJ/Capita in 2018 from 235.3 Gigajoules per capita (GJ/Capita) in 2017, registering a growth of 1.9%. Additionally, the oil production in the region increased to 22.59 million BPD from 20.16 million barrels per day (BPD), registering a growth of 12.1% in 2018. Moreover, according to the Annual Energy Outlook 2019 by US Energy Information Administration (EIA), the production of crude oil in the country is expected to reach 14.0 million BPD by 2040. Additionally, Key players in the Canadian oil and gas industry are focused on the development of the oil & gas industry in the country. For instance, in October 2017, Schlumberger along with Torxen Energy (Canada) signed an agreement with Cenovus Energy Inc. (Canada) to purchase Palliser Block in Canada, at an approximate cost of USD 1 billion, for carrying out the exploration of oil and gas wells reserves in Canada. Furthermore, In June 2019, Mexican state-owned petroleum company, Pemex announced the development of 20 new oil fields, 16 in shallow waters and 4 onshore fields with an estimated reserve of 1.1 billion crude oil barrels. Such factors are expected to increase the demand for oil well cement between 2019 and 2025.
Asia-Pacific is expected to hold a second-largest position in the global oil well cement market. According to the BP Statistical Review of World Energy report, 2019, the primary energy consumption per capita of Asia-Pacific increased by 3.3% from 58.3 GJ/Capita in 2017 to 60.2 GJ/Capita in 2018. The increase in E&P of oil and gas leads to the growth of the oil well cement market in the region as cementing is an essential part of the oil extraction process. Such factors are expected to drive the oil well cement market in Asia-Pacific during the forecast period. In the region, China is estimated to behold the largest share in the region during the forecast period owing to growing investments in the public sector in the oil & gas industry is expected to add to the demand for oil well cement in China. According to the World Oil Magazine published in March 2019, the country’s oil-producing companies, namely, PetroChina, China National Offshore Oil Corp. (CNOOC), and Sinopec, announced the investment of USD 77 billion in the same month to boost the output from the existing oil fields.
The Middle East & Africa is also expected to account for a significant share in the global market due to increasing offshore drilling activities that has led to an increase in the demand for oil well cement for extracting oil and gas from wellbores. In the region countries such as Kuwait, Qatar, Oman, Angola, and Nigeria are expected to hold a significant share of the global market owing to the growing offshore oil production in these countries, which is expected to add to the growth of the oil well cement market during the forecast period.
In Europe, Russia is expected to hold the largest share during the forecast period as Russia accounts for one of the highest production of crude oil and dry natural gas. Moreover, the increase in energy demand and growing number of exploratory projects for drilling wells is expected to drive the demand for oil well cement in the country during the forecast period.
In South America, Brazil is expected to hold the largest share in the oil well cement market. The increase in energy demand has led to an increase in E&P activities of oil and gas to meet the energy demand.
The key industry participants of the Global Market for Oil Well Cement include HeidelbergCement AG (Germany), Petrovietnam (Vietnam) Anhui Conch Cement Co., Ltd (China), Cebo International BV (the Netherlands), Buzzi Unicem SpA (Italy), Kerman cement (Iran), TPI Polene Public Company Limited (Thailand), Colacem SpA (Italy), LafargeHolcim (Switzerland), Omran Anarak Cement Co. (Iran), Kardisi Co (Syria), Raysut Cement Co. (Oman), Cemex SAB de CV (Mexico), Dalmia Bharat Ltd. (India), and Oman Cement Company (Oman).
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Global Oil Well Cement Market Research Report: Information by Product (Class A, Class G, Class H, and others), Application (Onshore and Offshore) and Region (North America, Europe, Asia-Pacific, Middle East & Africa and South America) – Forecast till 2025
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