Supply & Demand Dynamics
The number of ageing wells is increasing on a global basis; hence more intervention must be conducted and wire-line services used. Over the last few years, unconventional resources have been the primary driver for the ever-increasing demand for wire-line services globally.
Revenue-wise, the market for wireline services is dominated by North America and the Asia Pacific. The Middle East represents the smallest proportion.
The market for the Slick Line has been experiencing a decline, owing to its being a lower-value-adding activity because of both its technical limitations and the advancements made in other techniques. E-Line wire-line services, on the other hand, have been growing, owing to there being a higher number of old wells (conventional) that require intervention and monitoring. In addition, a number of downhole tools that were previously deployed by coiled tubing can now be deployed using E-Line, which is more cost-effective.
As a result of the current industry downturn, the demand for wireline services dropped significantly. Yet, in some areas, many operators may choose to work-over an existing well, rather than drilling a new one. 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 all the services, others are likely to specialize in Slick Line only. As a result of that, the acquisition of small companies by bigger counterparts is expected for the foreseeable future, as part of the growth strategy.
Almost all wire-line equipment is manufactured by 3rd parties who do not provide the services directly.