Supply & Demand Dynamics
Demand for E-logging and formation evaluation is heavily driven by exploration and appraisal activities around the world, as well as field development, reappraisal or redevelopment. Around 80% of E-logging services are required during exploration and appraisal activities, with 20% being done during development or reappraisal phases when E-logging is used where more data accuracy is required. E-logging is considered to be a much more accurate data collection method, than Logging While Drilling (LWD) and used when data precision is critical.
Demand patterns for Perforating services exhibit different dynamics and a number of variables affect the segment. Services are used during appraisal, development and well intervention (re-perforation) stages. Depending on the reservoir (when open-hole completion is used) or pre-perforated liners are used, the demand for services is very insignificant, during appraisal and development stages. On the other side, if the subsurface conditions require perforating each well, then the volume of perforating activities is significant. Hence, the key demand driver for perforating services is the type of reservoir and the number of wells that are part of well-testing requirements, field development, and well intervention. (Re-perforation is described as part of Well Intervention in Remedial and Repair Services).
Supply of E-logging, formation evaluation and perforating services is composed of personnel and equipment. Due to the complexity, financial and technical risks of the category, a great deal of planning is required, whereby engineers from various domains work together to design logging and /or perforating programmes.
Around 70% of equipment is proprietary to major service providers, with the rest being manufactured by 3rd party companies who do not provide the services directly. Manufacturing facilities of E-logging, formation evaluation and perforating equipment are concentrated in key hubs in North America, the North Sea, and South East Asia. Due to a high-risk operation, the integrity, reliability, and accuracy of equipment require a significant QA/QC process.
Key services companies historically dominating the segment are Schlumberger, Baker Hughes, Halliburton, and Expro, with many more providers in the lower-tier segment where the temperature and pressure regimes are less severe and down-hole tools are widely available in the market. The lower-tier segment is highly competitive since a significant amount of logging equipment is manufactured by 3rd parties, whereby free market access to the tools creates a highly competitive environment.