From lows of US$61 billion in 2016, global onshore expenditure is set to increase at a rate of 8% year-on-year through the forecast period to US$83 billion by 2020 – driven by a recovery in North American shale drilling.
Onshore growth will be offset by developments offshore, where the story is less promising. Offshore OFE expenditure is expected to decline from US$67 billion to US$43 billion between 2016 and 2020, primarily due to a significant drop in project sanctioning and an oversupply of drilling units. The decline in offshore expenditure will lead to a flat global profile through to 2020 for total OFE expenditure, which is set to total US$125 billion in 2020, down from US$128 billion in 2016.
Declining offshore spend coupled with increasing onshore activity will result in onshore recovering this share of expenditure from lows of 48% in 2016 to 66% in 2020 – higher than at any point in DW’s hindcast. Due to the recovery in onshore OFE expenditure, DW expects equipment lines associated with onshore drilling activity to exhibit strong growth profiles through the forecast period – Conveyancing Tools, Downhole Drilling Equipment and Tubular Goods will show particularly strong growth profiles, increasing 10%, 13% and 13% year-on-year, respectively.
DW’s analysis has highlighted key growth sectors onshore, providing much-needed opportunities for manufacturers in a dampened market.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/10102016/world-oilfield-equipment-market-onshore-set-to-recover-expenditure-share/