The global packer market is highly concentrated as leading companies hold the maximum share, reports Transparency Market Research in a new study. The competition among the players in the global packer market is expected to stay high as the players strive to introduce innovative and differentiated products. The leading players are also focusing on reducing costs and enhancing quality to gain a lead over their competitors. The global packer market is dominated by Weatherford International Ltd. followed by Halliburton and Baker Hughes Incorporated. Together they accounted for approximately 50% of the overall share in the global packer market in 2013.
The global packer market is projected to rise at a CAGR of 9.0% from 2014 to 2020. The market stood at a valuation of US$3.19 bn in 2015 and is projected to rise to US$4.93 bn by 2020. Permanent packers are expected to emerge dominant in the product segment with a share of 60.5% by the end of 2020 owing to their durability in high pressure and temperature situations as compared to retrievable packers. The application of permanent packer is significantly high in drilling activities in deep and ultra-deep oil and gas reserves as they can withstand considerable mechanical strain.
North America to Maintain Lead in Packer Consumption until 2020
North America is expected to gain a lead over other regions owing to a large number of on and off shore drilling and exploration activities in the region. The region is expected to account for 35.1% of the overall share in the global packer market in 2020. The discovery of vast shale gas and oil sand reserves in several areas in the U.S. and Mexico is further expected to boost the demand for packers in the region with the rise in equipment being deployed for the drilling process. Large offshore oil and gas reserves in Mexico and the extensive imports of oil and gas from the country are other factors driving the growth of the packer market in North America.
Growth in Oil and Gas Upstream Disbursement to Augment Sales of Packers Globally
Upstream activities such as exploration and production of oil and gas have gained prominence over the last couple of years owing to the rising demand for fossil fuels. Upstream expenditures involve the cost of drilling, transportation, and survey among others. “With the need to fund new oil and gas exploration and production projects, oil and gas companies are spending more on upstream activities. As a result of this, manufacturers of various components required in the drilling process are likely to benefit in the coming years.” says a TMR analyst. As oil and gas companies are key consumers of packers, the global packer market is estimated to witness substantial growth by the end 2020.
Moreover, the discovery of numerous shale gas reserves in the U.S and the boom in the shale gas industry is another factor driving the demand for packers. With the adoption of horizontal drilling and hydraulic fracturing, the use of high quality packers is also anticipated to increase in the coming years.
Packer Seal Failure due to Quality Constraints to Pose Threat to Market Growth
Packer units are prone to possible damages such as frictional damage or cutting due to sharp edges during drilling processes. In sensitive drilling areas, packers are vulnerable to extensive damage. Operational factors such as seal failures and damage caused due to temperature and pressure hinder the drilling process. Installation of low quality packer is another factor inhibiting the growth of the global packer market. Low quality packers do not have high resistance capacity, as a result of which oil and gas drilling companies are shifting towards alternatives.
However, the untapped potential of oil and gas reserve discovery in Africa and rise in investments by national and private companies are likely to present manufacturers of packers with growth opportunities to capitalize on and enhance their consumer base.
The review is based on the findings of a TMR report titled, “Packer Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2020.”
The global packer market is segmented as:
Global Packer Market by Product
Global Packer Market by Region
- North America
- Asia Pacific
- Rest of the World (RoW)
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