+1-518-618-1030 866 - 552 - 3453 USA-Canada Toll Free

Production of Unconventional Gas to Heighten Demand for Artificial Lift Systems

Posted on Jul 20, 2016

The artificial lift systems market is consolidated in nature and includes only a few players. The market is known for its high expertise requirements and thus, it is led by the major players operating in the market, suggests Transparency Market Research (TMR). Some of the leading players in the market are Flotek Industries Inc., Dover Artificial Lift, Baker Hughes Inc., Borets Company LLC, Halliburton Company, and Kudu Industries Inc. 

Manufacturing artificial lift systems is capital intensive and involves time-bound processes, thus even a minor delay can result in a huge monetary loss for manufacturers. The threat of new entrants is low and will remain so in the coming years as new entrants lack the expertise required. Key players are striving hard and concentrating on R&D activities so that the use of artificial lift system technology can extract a higher amount of natural gas and crude oil from the reserves. Case in point. Flotek Industries Inc. has signed a Letter of Intent with Oman-based Gulf Energy to construct an R&D center for oilfield chemical production in Oman.

Expanding Deepwater Oil Production to Increase Demand for Artificial Lift Systems

Due to the growing demand for crude oil and natural gas, the onshore reserves have been depleted. This has led to the exploration of offshore deepwater reserves by many companies. This is expected to create a heightened demand for artificial lift systems. Moreover, advancements in technology have also encouraged exploration and production (E&P) companies to invest in offshore reserves. “As artificial lift systems increase the production of crude oil and natural gas, they are increasingly in demand by various offshore exploration and production companies”, states a TMR analyst.

Mature oil fields account for 70% of the total oil production across the globe and is another major driving factor impacting the global artificial lift systems market. As the depth of mature wells is more, operators rely on artificial lift systems in order to bring the fluids to surface. This drives the demand for artificial lift systems.  

High Financial Risks Associated with Fluctuating Crude Oil Prices Cause for Concern

The decreasing prices of crude oil are affecting investments in the artificial lift systems market. This is because artificial lift systems are resource- as well as capital-intensive owing to the overall complexity of E&P activities and high equipment costs. There are huge financial risks involved in the exploration and extraction process. The financial risk is heightened with the fluctuating price of crude oil. The cost of crude oil extracted without using artificial lift systems is significantly lower than the cost of crude oil extracted through the use of artificial lift systems. This is another factor challenging the use of and demand for artificial lift systems.

Heightened Demand for Crude Oil and Natural Gas to Push Production of Unconventional Gas

The increase in population coupled with rapid industrialization have led to a heightened demand for crude oil and natural gas. This has forced players in the market to focus on unconventional gas resources to meet demands of consumers, states a TMR analyst. Unconventional gas resources require special techniques such as hydraulic fracturing and horizontal drilling for the production of oil and gas. Hydraulic fracturing leads to high production rates initially, but the production rate declines due to low permeability of shale gas, leading to a need for artificial lift systems. Thus, the unconventional production of oil and gas is creating a demand for artificial lift systems, opening new growth opportunities in the market.

By product type, the global artificial lift systems is led by the electrical submersible pump segment. The electrical submersible pump segment was the largest in 2013 and is expected to lead in the market in the coming years. By geography, North America led the global artificial lift systems market in 2013. North America is expected to retain its leading position and account for 36.0% of the global market by 2020.

According to the report, the global market opportunity in artificial lift systems will rise from US$13,000.0 mn in 2013 to US$19,806.8 mn by 2020, expanding at a 6.20% CAGR between 2014 and 2020.

This information is based on the findings of a report published by Transparency Market Research titled “Artificial Lift Systems Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2020.”

The global artificial lift systems market is segmented as follows:

Product

  • Electrical submersible pump
  • Rod lift
  • Progressive cavity pump
  • Hydraulic pump
  • Gas lift
  • Plunger lift

Regional

  • North America
  • Europe
  • Asia Pacific
  • Rest of the World (RoW)

About Us

Transparency Market Research (TMR) is a market intelligence company, providing global business information reports and services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insight for thousands of decision makers. TMR’s experienced team of analysts, researchers, and consultants, use proprietary data sources and various tools and techniques to gather, and analyze information. Our business offerings represent the latest and the most reliable information indispensable for businesses to sustain a competitive edge.

Each TMR syndicated research report covers a different sector - such as pharmaceuticals, chemicals, energy, food & beverages, semiconductors, med-devices, consumer goods and technology. These reports provide in-depth analysis and deep segmentation to possible micro levels. With wider scope and stratified research methodology, TMR’s syndicated reports strive to provide clients to serve their overall research requirement.

US Office Contact

90 State Street, Suite 700
Albany, NY 12207
Tel: +1-518-618-1030
USA - Canada Toll Free: 866-552-3453
Email: sales@transparencymarketresearch.com
Website: https://www.transparencymarketresearch.com

Back To Top