Supply & Demand Dynamics
On a global basis, engineering services in the Oil & Gas industry are on the top 3 list of demand sectors, which makes it a very large “consumer” of engineering expertise and man-hours. The demand for engineering services in the upstream petroleum industry is directly affected by:
- New projects, both offshore and onshore
- Brownfield and tie-in projects
- Maintenance and operations ( to a lesser extent)
The total global market size of engineering services is around $1 trillion and expected to reach around $1.4trillion by 2020 (Shiva Engineering).
Over the years, the market for engineering services went through various cycles of consolidation and growth. Yet, the number of engineering houses is extremely diverse and spread geographically and per expertise and discipline. The segmentation patterns are generally around size, expertise, and geography, and could be divided as follows:
- Large, global, integrated and multi-discipline engineering companies
- Niche companies who specialize in a particular geographic market and may have multi-discipline capabilities
- Small engineering companies who specialize in a particular set of disciplines, e.g. marine & subsea
- Very niche companies that are known for unique expertise, e.g. pipeline routing or vibration management and alike.