Supply & Demand Dynamics
Demand for deployment tools is growing worldwide, as a direct result of the steady increase in well intervention activities brought about by the continuous efforts needed to maintain and maximise production within existing oilfields. In parallel to that, the number of ageing wells is increasing; hence more intervention must be conducted.
The continuous investment in the Middle East by NOCs along with the ever-increasing technological challenges means that, in the long run, the region will witness a steady increase in demand for well intervention services. This region is already considered to be the market with one of the highest penetration rates of well intervention services, both onshore and offshore.
Close to 50% of coiled tubing services are provided in North America, with the USA being the biggest market. Around 70% of the demand for coiled tubing services in the GCC is driven by well intervention activities.
As a result of the current industry downturn, the demand for coiled tubing services dropped significantly, making some companies shut down their CT business units in certain places. The demand is not expected to stabilize till mid to end of 2021.
Owing to the relatively low entry barriers and simple technology, the market is very competitive with a large number of players, of various sizes, fragmented around the world and across the value chain. While some companies are fully integrated to provide the whole spectrum of well intervention services, others are likely to specialise in small segments of it on a regional basis. The majority of coiled tubing equipment is manufactured by third parties who do not provide coiled tubing services directly
The GCC market is composed of national/domestic service providers and international players, with the latter being dominant. There are, however, a number of local service providers who are heavily focused on domestic markets and who rarely venture out of the home country, even on a regional basis. Schlumberger and Halliburton are the regional leaders, followed by Baker Hughes, Uni Arab Engineering, NPS, Al Ahlia Services, Nordic Gulf and Gulf Energy, being notable players. There are more than 25 small local outfits owning CT units across the region.
Below is the growth rate of the units over the last 10 years. While most of the regions exhibited either a decline or a small increase in count, Middle East region witnessed the highest increase in coil tubing units from 209 in 2015 to 258 in 2016, and then down to 217 by 2020.
Global CT units count as of Q2 2020 ( source: ICoTA)