Oil Country Tubular Goods (OCTG) Market: Structure and Overview of Key Market Fo
Posted by Harshad Borde on May 24th, 2019
Oil country tabular goods (OCTG) is a family of the seamless rolled products which consists of casing, drill pipe, and tubing subjected to the loading conditions according to the specific applications. Oil & gas production and exploration activities are complicated processes and require sophisticated equipment and technology as this market is highly cyclical and volatile in nature. The fall in commodity prices have ripple effects on the oil & gas value chain.
Over the past few decades, the oil & gas industry has witnessed active drilling rig count, thereby creating demand for oilfield services across the globe. The decline in oil prices has decreased the demand for oil country tubular goods. With the recovery of crude prices, the oil country tubular goods (OCTG) market has witnessed positive growth which is driven by the rising shale production and hike in unconventional and horizontal drilling activity.
Oil Country Tubular Goods (OCTG) Market – Drivers and Restraints
Growing drilling activities is anticipated to drive the demand for OCTG over the forecast timeline. However, lack of skilled labor and high initial investment are expected to be major hindrances to the development of all verticals of the oil & gas industry. The major drop in oil prices in 2014 severely impacted the industry and undercut company revenues, thereby forcing sharp cutbacks in spending. The increasing demand for energy and production is one of the major factors driving the growth of the oil country tubular goods (OCTG) market.
Activities in the oil & gas sector have begun to strengthen as the commodities are recovering followed by the multi-year price rout. With oil & gas prices recovering, companies have increased their investment which were earlier stalled or delayed for the development of oil & gas projects. Oil country tubular goods suppliers are expected to benefit from the same with the increasing activities post recovery. The intense competition amongst producers of petroleum is also serving as a driver for the increasing drilling activity across the globe.
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The emergence of horizontal drilling methods and hydraulic fracturing technology in the past few years has significantly increased the demand for oil country tubular goods. Offshore oil & gas caters to a large part of the production revenue and the rising production of shale resources will drive the demand for OCTG goods over the forecast timeline.
Oil Country Tubular Goods (OCTG) Market – Segmentation
The global oil country tubular goods (OCTG) market can be segmented on the basis of manufacturing process, grade, and region. Based on manufacturing process, the oil country tubular goods (OCTG) market is classified into seamless and electric resistance welded. By grade, the oil country tubular goods (OCTG) market can be divided into Premium and API grade. In terms of region, the oil country tubular goods (OCTG) market can be segmented into North America, Asia Pacific, Europe, Middle East & Africa, and South America.
North America accounted for major market share in 2017. Rig count has significantly decreased globally since 2014, thereby affecting the demand for oil field services in the past few years. North American rigs are still the highest in quantity as compared to the Middle East, followed by Latin America. Rig efficiency in the U.S. is rising as these are increasing at a significant rate owing to technological advancements. The consumption of OCTG per rig per month has doubled since 2012 which is driven by the greater drilling complexity and increased lateral lengths. The expansion of well production and new well drilling in the region is anticipated to drive the demand for oil country tubular products in the North America region over the forecast timeline.
Oil Country Tubular Goods (OCTG) Market – Key Players
Some of the major competitors of the global oil country tubular goods (OCTG) market are National-Oilwell Varco Inc, ArcelorMittal SA, Iljin Steel Co., TPCO Enterprise Inc., TMK Ipsco Enterprises Inc., Nippon Steel & Sumitomo Metal Corporation, U. S. Steel Tubular Products Inc., Tenaris SA, and Vallourec SA.
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About the AuthorHarshad Borde
Joined: April 26th, 2019
Articles Posted: 526
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