Liner Hanger Systems: Introduction
- Liner hanger is a vital system in oilfield drilling that enables the liner to be suspended in the previous casing string to reduce material cost (metal cost and cementing cost) and provide efficient complete solution for oilfield drilling. Liner hanger system offers cost advantage over full casing string. It offers better cementing (major operation performed to seal the annulus between the casing and formation), thus enhancing the rig capacity.
Key Drivers and Restraints of Liner Hanger Systems Market
- Crude oil and natural gas are the types of fossil fuels that are extracted from the earth’s subsurface by drilling. Oil and gas resources are used as fuel for electricity generation due to their high calorific value. In industrial applications, crude oil is used as feedstock for the production of tar, asphalt, paraffin wax, lubricating oils, etc. In residential and commercial applications, oil & gas sources are used for heating purposes. Crude oil is a vital feedstock used in the production of jet fuel, gasoline, and diesel fuel. Thus, demand for crude oil has been rising continuously, as it is used to meet the increasing need of transportation fuels. Thus, rise in demand for oil and gas is anticipated to lead to higher extraction of crude oil. In turn, this is projected to fuel the liner hanger systems market during the forecast period.
- Increase in demand for oil and gas as well as other petroleum products; and high oil prices across the globe have compelled market players to invest significantly in finding new offshore reserves of oil and gas. According to Rystad Energy, approximately 600 new offshore oil & gas projects are expected to commence operations by 2025. Investment in development of new offshore oil & gas projects is expected to surpass the value of US$ 480 Bn by 2025. Rise in demand for crude oil and natural gas in developing countries; and presence of ageing onshore field are driving investments in new offshore projects. Thus, discovery of new offshore oil reserves is anticipated to boost the liner hanger systems market during the forecast period.
COVID-19 Impact Analysis on Oil Prices
- Governments of several countries across the globe have imposed stringent lockdowns to limit the spread of the coronavirus. Movement of individuals and economic activities, related to goods and services, have come to a halt because of lockdowns. Countries that are net exporters of oil have been facing challenges due to the unprecedented situation driven by the COVID-19 pandemic. On April 20, 2020, oil prices recorded negative value for the first time. The prices of oil fell from US$ 17.85 per barrel to negative US$ 37.63. According to the International Energy Agency, revenue of oil & gas key producers decreased by 50% to 85% in 2020 compared to that in 2019. Demand for oil contracted by 9% and fell to 93.10 mb/d in 2020 compared to that in 2019. Thus, extraction of crude oil declined due to the decrease in oil prices. This hampered the liner hanger systems market.
Liner Hanger Systems Market Segmentation
- The global liner hanger systems market can be segmented based on type and location of deployment
- In terms of type, the global liner hanger systems market can be divided into mechanical liner hanger, hydraulic liner hanger, and expandable liner hanger
- In terms of location of deployment, the global liner hanger systems market can be segregated into onshore and offshore
Liner Hanger Systems Market: Regional Segmentation
- In terms of region, the global liner hanger systems market can be split into Middle East & Africa, Latin America, Asia Pacific, Europe, and North America
- According to BP Statistical Review of World Energy 2020, Europe had around 66.7 trillion cubic meters of proved natural gas reserves in 2019, which was the second largest in the world. In terms of production of oil and gas, Europe contributes more than 19% of the world’s total oil production. Russia and CIS is the third largest oil producer and second largest gas producer in the world. The sub-region (Russia and CIS) is receiving large investments from foreign firms in its upstream sector. These firms are striving to secure their supply of crude oil from Russia and CIS.
- Demand for oil in Asia Pacific is projected to rise by 1.7 mb/d by the end of 2021. China and India are the major countries that would be responsible for this growth. According to GlobalData, 676 new projects are set to commence their operations in China between 2021 and 2025. Thus, rise in demand for oil in is expected to result in higher extraction of oil. This, in turn, is anticipated to boost the liner hanger systems market during the forecast period.
Key Players Operating in Global Market
- Baker Hughes Company
- JC Petro
- TIW Corporation
- NOV Inc.
- SCM Daleel
- Allamon Tool Company Inc.
- Tianjin Elegant Technology
- DEW GmbH
Global Liner Hanger Systems Market: Research Scope
Global Liner Hanger Systems Market, by Type
- Mechanical Liner Hanger
- Hydraulic Liner Hanger
- Expandable Liner Hanger
Global Liner Hanger Systems Market, by Location of Deployment
Global Liner Hanger Systems Market, by Region
- North America
- Russia & CIS
- Rest of Europe
- Asia Pacific
- Rest of Asia Pacific
- Latin America
- Rest of Latin America
- Middle East & Africa
- South Africa
- Rest of Middle East & Africa