In a recent forecast to the World Oilfield Equipment Market Forecast, Douglas Westwood has described that 2017 has seen a strengthening onshore rig count, led by US activity, but firms within the offshore sector have seen little abatement to the challenges presented in recent years
“The contrast between the equipment and service sectors is very evident,” said the report. Westwood’s recent drilling and well services market forecast showed a sharper decline since the downturn but with a stronger growth outlook to 2021.
The Oilfield Equipment sector, on the other hand, has been better-supported by backlogs since 2014, but faces a period of suppressed activity in the near-term.
According to the World Oilfield Equipment Market Forecast Q3 2017, total global expenditure has been growing at an expected CAGR of 0.7 per cent through to 2021, as compared to 1.1 per cent in Q2 2017.
“Whilst global equipment expenditure has undoubtedly been boosted by the recovery in the US oil patch, prospects for the wider equipment manufacturing community will remain troubled until the upturn spreads to high-cost offshore project sanctioning on a wider scale,” the report described.
This is in contrast to the drilling and well services sector, which bore the brunt of Capex reductions in 2015-2016, but is now expected to see strong growth.
Westwood’s onshore oilfield equipment outlook shows a five per cent CAGR for global expenditure, with all regions seeing positive average growth rates during the forecasted period. The vast majority of the growth in onshore expenditure will come from North America, which will see an 8.4 per cent CAGR over the forecast.
The US rig count growth has slowed in the last quarter while the divergence between WTI and Brent crude prices have widened.
In the offshore space, Westwood expects a decline of 4.7 per cent CAGR. This is due to delays to expected project sanctioning in recent months, in addition to a continued worsening of the long-term MODU construction outlook.
The World Oilfield Equipment Market Forecast aims to offer unique insight into more than 60 different equipment types across upstream and midstream and is an essential product for business planners and those looking to make informed investment decisions.
