Supply & Demand Dynamics
Demand for core analysis is driven by exploration and appraisal activities around the world and to a small extent by field re-development. Around 95% of core analysis services are required during exploration/appraisal activities. Due to limited exploration activities in GCC, the current oil price environment, the demand for core analysis is very low globally.
In addition, GCC represents the smallest proportion in this segment, due to major discoveries being made in the last century. Due to the latest awards of an onshore exploration block in UAE, the demand for core analysis in UAE may increase, once drilling commences in the nearest time.
The supply of core analysis services includes personnel and laboratory equipment. As a result of the complexity of core analysis, knowledge of reservoirs and laboratory QA/QC procedures are of utmost importance to ensure accurate and detailed analysis. Due to cyclical nature of this segment, service providers try to keep capacities balanced and in times of high demand, there is always a significant lead-time to book a slot for analysis.
At this point of time we do not expect Q3 and Q4 2020 to be busy.
Intertek, Core Lab and ALS have been market leaders for years. There are a number of other players available with various specialized expertise and geographic locations, such as below. A general trend in this segment is services providers try to go away from volatile and cyclical exploration related activities to production management and production enhancement.
- Core Lab
- Stratum Reservoir
- KTIB Holding