Oilfield Equipment Rental Services Market growth is expected to register 4.91% CAGR by the year 2027 and is expected to surpass USD 125.5 billion by 2027.
The oilfield exploration activities are highly natural by using advanced technologies and need specialized equipment for drilling, extracting, exploring, and other related activities. The equipment for rent is very cost-effective because it is used for a particular period and is available for cheaper rentals. To attain an efficient oil & gas extraction operation, various equipment is very essential which including pumps, tubes, valves, wireline tools, blowout preventers, drill bits, artificial lift systems, and mud pumps.
Horizontal drilling, deep drilling, and exploration of unconventional hydrocarbons are enabled by the oilfield equipment. For the exploration of oil & gas, industrial players are highly investing in drilling operations. Most of this equipment & services refer to all the products and services associated with the upstream energy industry including well completion, drilling, well logging, well intervention, and others. By reducing the initial costs of renting, the oilfield equipment rental services market will be propelled. Rapid growth in industrialization and rising demand for oil & gas are accelerating the growth of the market. This equipment helps in assisting in setting up oil & gas wells along with offering an end-to-end solution for repairing, manufacturing, and maintaining tools and equipment used for drilling wells. This equipment is used in both offshore and onshore applications.
Owing to the rapid rise of industrialization and increasing demand for oil and gas has created a positive outlook for the Oilfield Equipment Rental Services Market. With the advent of technological advancements like horizontal drilling, vertical drilling, Radio Frequency enabled Identification enabled device that enhances the drilling and hole cleaning operations. In recent years, offshore exploration activities have increased tremendously combined with the extensive growth of infrastructural development in several countries. Such factors have aided the Oilfield Equipment Rental Services Market growth.
COVID 19 has created a major economic change across the globe, where the majority of the industries currently recovering. However, the Oilfield Equipment Rental Services Industry has been affected severely as the production and supply chain departments have been disturbed. As several countries have imposed rules concerning movement restrictions, delivering the pieces of equipment to the operating companies has been difficult throughout the pandemic.
The developed countries like Europe, Northern America are extensive users of Electric vehicles. The emergence of new technologies and the continuous demand for oil and gas have propelled the Oilfield Equipment Rental Services Market growth despite the pandemic. However, the pandemic has slashed the prices of crude oil which created a severe impact on the Equipment Rental Services Market value.
Purchasing oilfield equipment can burden the operating industries with higher capital investments. Managing the equipment and shifting the pieces of equipment from location to location consume more time and energy. Hence the majority of the Oilfield operating industry prefer to rent or hire the oilfield equipment as they provide customized options as well.
The factor that propels the operating sector to rent the Oilfield Equipment is convenience. The majority of startups are reluctant in purchasing Oilfield equipment as they impose heavy capital investment on the industry. The maintenance and exploration activities require skilled professionals. Such factors are majorly driving the Oilfield Equipment Rental Services market demand.
The demand for power generation from renewable sources is increasing in several developed countries. However, there are still emerging industries that rely on fossil fuels for energy. This prospect keeps the demand for fossil fuels higher. The products produced by crude oil refineries possess higher demand. For instance, demand for gasoline, plastics, diesel remain higher despite the fluctuations in oil prices. The growing demand for these products offers significant growth opportunities for the Oilfield Equipment rental Services Industry.
The Shifting trends of the operating industries towards the unconventional reserves have increased the necessities of safer and specialized equipment. Unlike conventional reserves, they require specialized operations to obtain shale gas, heavy oil, oil sands, etc. Equipment like Multi-well pads is utilized to reduce the pipeline routes, minimize the disturbance to the public and carbon footprint. Such specialized equipment requires higher maintenance.
The complexity of the drilling process has been increased in recent years owing to the depletion of existing reserves. Exploring new reserves and carrying out essential operations like cementing, well completion, well intervention requires skilled operators and advanced technology. These factors have increased the demand for customized drilling equipment. Hence the rental equipment providers are expected to stock up the advanced equipment utilized in complex techniques like horizontal techniques. This has imposed significant stress on the Oilfield Equipment Rental Services industry.
For efficient performance and sustain in the market, and Oilfield Equipment Rental Services industry requires higher capital investment as they have to constantly alter the equipment inventory.
As several drilling and extraction operations have been carried out in the existing oilfields, the production in those oilfields has slashed down significantly. This has propelled the oil and gas companies to expand their exploration activities to the deep water and extreme climatic conditions. Exploration beneath salt, carbonate and basalt reservoirs has increased the complexity of every operation and increased the operational costs up to USD 100 million. Bringing the exploration costs down has been a major challenge for the Oilfield Equipment Rental Services industry.
Oilfield production is fluctuating in recent years. Recovering investment or recycling has been the major challenge for most of the Oilfield industries.
Cumulative growth analysis:
The global Oilfield Equipment Rental Services market is currently witnessing slow-paced growth due to several restraints in the market. However, the price fluctuations are expected to bounce back soon. Hence the Oilfield Equipment Rental Services Market growth is expected to register 3.31% CAGR by the year 2030 and is expected to surpass USD 21 billion by 2022. As technological advancements have minimized the efforts required in the exploration and drilling activities, the Oilfield Equipment Rental Services Market outlook is promising in the forecast period.
The automated drilling systems, seismic technologies, horizontal drilling enable the operators to acquire precision in their drilling operations. The ongoing demand for crude oil and the products derived from Crude oil has propelled the overall Oilfield Equipment Rental Services Market growth.
Value chain analysis:
The Oilfield Equipment Rental Services Market growth is continuously stimulated by several advancements in technologies utilized in the processes. The majority of operating industries combine hydraulic fracturing and horizontal drilling which enables the operators to access the oil and gas reserves even from lower permeability formations. Some of the Oil and gas manufacturers find renting Oilfield Equipment is costly in the long run than purchasing. The available tax write-offs will be raided on renting the equipment. The oil and gas industry that requires regular exploration and drilling activities will prefer to own them instead of renting them. Such factors have restricted the Oilfield Equipment Rental Services Market growth.
The unavailability of the required Oilfield Equipment is considered as the key market restraint, the time wait for the desired equipment can postpone the production and impose huge loss in the labor prospect also.
Based on equipment:
Based on application:
Based on type:
In the year 2019, Norway has drilled more than 130 wells to compensate for the declining oil production of the country. 55 wells were exploratory; this effort has propelled the growth by 16% when compared to the previous achievements. Currently, North America is expected to hold the largest share in the Oilfield Equipment Rental Services market as they have higher unconventional hydrocarbon production over other regions. Moreover, the Gulf of Mexico is currently focusing on expanding its exploration and production activities in offshore regions. Hence these regions are gaining momentum owing to the increased production activities.
Canada is expected to establish a higher production rate in the forecast period. Since the region is the fourth-largest producer of crude oil accounting for over 31% of the global production. This prospect has induced the matured market players to invest more in the region.
This report has covered:
|CAGR||3.31% CAGR (2022-2030)|
|Forecast Period||2022 to 2030|
|Historical Data||2019 & 2020|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Drilling Equipment, Pressure & Flow Control Equipment|
|Geographies Covered||North America, Europe, Asia-Pacific, and Rest of the World (RoW)|
|Key Vendors||Halliburton Co. (U.S.), Oil States International Inc. (U.S.), Schlumberger Ltd (U.S.), Superior Energy Services Inc. (U.S.), and Weatherford International Ltd. (Switzerland), Baker Hughes (U.S.), National Oilwell Varco (U.S.), Cameron International Inc. (U.S.), Transocean Ltd. (Switzerland), B&B Oilfield Equipment Corp (U.S.)|
|Key Market Opportunities||Increase in utilization of non-conventional oil and gas field|
|Key Market Drivers||
The market is expected to grow at 3.31%.
Delivering the equipment to the users at competitive prices, higher fuel prices, price volatility, disruption in fuel supply lines are some of the challenges faced by the Oilfield Equipment Rental Service industry.
• Drilling • Pressure and flow control • Pumps • Machinery
• Baker Hughes of USA • Halliburton of USA • Transocean of Switzerland • Oilstates International Inc of USA