Market Trends of Brazil Wireline Logging Services Industry
This section covers the major market trends shaping the Brazil Wireline Logging Services Market according to our research experts:
Offshore Region To Dominate The Market
- The offshore oil and gas sector had been subdued in the past few years, mainly due to the crude oil price being lower than the breakeven price of several offshore oil and gas fields. As a result, the demand in the oil and gas wireline services market was negatively impacted.
- The Brent crude oil price started showing signs of improvement after mid-2016 and remained well above USD 60 per barrel throughout 2018. This, coupled with the cost reduction program of upstream oil and gas companies, resulted in gaining the confidence of investors for final investment decisions for projects, which got canceled during the low commodity price environment.
- For instance, In Brazil, the pre-salt layer production reached over 1.5 million bpd in 2018, and it accounted for over 55% in the country's total oil production. Pre-salt oil is produced from wells drilled during the last decade, thus, providing a way to increase wireline and perforating services.
- However, in early 2020, oil prices got severely affected by the OPEC deal cancelation and excessive crude oil and gas flow in the international market. This is expected to slow down the investment in the offshore region. Thus, it is expected to have a negative impact on the growth of the market during the forecast period.
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The Deepwater and Ultra-deep water Activities to Drive the Market
- The investments related to deep-water projects are expected to be limited before 2025. These resources are typically more expensive to develop, take a longer time to reach full production, and require additional investment in infrastructure, because of their presence in remote locations. However, most of the projects that are currently under development are expected to continue their operations.
- Despite high fixed costs and the requirement of long lead times from project conception to the first production, offshore deep-water oil projects provide large production volumes that can achieve relatively low per-barrel operating costs over the reservoir life cycle.
- Moreover, The two offshore projects in Brazil, namely, Libra and Itapu, are expected to receive USD 15.8 billion worth of investments, with USD 2.2 billion just in signing bonuses on the 16th Bidding Round held in October 2019, thus, providing a way to increase wireline and perforating services.
- Besides, Weatherford signed a USD 87 million deal with Brazil's national oil company, Petrobras, for providing fishing and intervention services in September 2019.
- Further, Petrobas is the leading firm in Brazil, in terms of planned production and capital expenditure in the oil and gas sector. The company has expected to make investments worth USD 90.9 billion between 2016 and 2025, in Brazil.
- The discoveries of oil and gas fields demand exploration of the area to reach the production stage. Thus, these discoveries are expected to drive the country's wireline logging services market during the forecast period.
