Oilfield Services Providers Are Positioned For Continued Growth
The oilfield services industry has evolved into a large, multi-faceted industry, one that provides nearly all of the people, technology and innovation required to run an oilfield. These services are critical to the upstream industry, but they also serve as a conduit for innovation and competitiveness. As a result, there's intense competition among suppliers, resulting in rapid technological development and innovation. In-house ownership of oilfield services would not have resulted in such rapid advances or competition.
In recent years, the oil price slump has created an opportunity for oilfield tools supplier. These companies have been able to capitalize on the improving demand for oilfield services, and they expect industry fundamentals to remain conducive to growth. Moreover, they are positioned for continued growth in both domestic and international markets. Halliburton is a Zacks Rank #3 (Hold), and it has demonstrated cash flow generation capabilities. Baker Hughes is another company that is securing cashflows from its growing oilfield services business.
Oil exploration and production activities will increase over the next few years, driven by increasing global demand and lucrative investment opportunities. Baker Hughes GE was recently awarded an oilfield services contract by i3 Energy PLC to perform drilling activities on its Liberator and Serenity assets in the North Sea. Conventional onshore oil is projected to account for the majority of oil production worldwide. According to the DNV GL Energy-Transition-Outlook report, conventional onshore oil production will reach approximately 83 million barrels per day in 2022. However, unconventional onshore oil production is expected to double to 22 million barrels per day by 2035, representing almost 30 percent of global crude oil production, click here to learn more.
The Middle East & Africa region offers substantial market potential, due to its non-complex formations and untapped hydrocarbon production capacity. Several countries in the region are members of the Organization of Petroleum Exporting Countries (OPEC), which sets the price for oil and gas. Other prominent countries include Algeria and Oman.
By application, oilfield services can be segmented into onshore and offshore applications. The onshore application is expected to account for the largest market share by 2022. The onshore application is most prevalent in North America, and is expected to grow the fastest during the forecast period. New well discoveries and improved oil and gas production are expected to drive the market during this period.
In terms of profitability, oilfield services companies have been hit by the 2014 oil price crash. Despite this, they still have a chance to restructure their businesses to remain profitable. In an effort to remain competitive in the new energy market, oilfield services companies in North America must focus on delivering low-cost products and services to the energy industry and to boost the efficiency of its operations. You may need to check out this article: https://www.encyclopedia.com/science-and-technology/chemistry/organic-chemistry/oils to get more info on the topic.
Oilfield services companies are responsible for providing various services related to oil and gas exploration and production. These services include drilling, well construction, and completion, and energy data management. While oilfield services companies do not produce petroleum themselves, their services are necessary for the success of oil and gas exploration.