Market Trends of Middle East Wireline Services Industry
This section covers the major market trends shaping the Middle-East Wireline Services Market according to our research experts:
Offshore to Dominate the Market
- The offshore oil and gas drilling sector has 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 the COVID-19 pandemic and remained well above USD 60 per barrel throughout 2021. This, coupled with the cost reduction program of upstream oil and gas companies, gained investors' confidence for final investment decisions for projects which got canceled during the low commodity price environment.
- For instance, in 2022, ENI, an Italian gas company, made a gas discovery in offshore Block 2 in Abu Dhabi, and it is estimated that the well has around 1.5-2 trillion cubic feet of raw gas, and the completion of the well is expected to be completed by the second quarter of 2022. These new offshore exploration projects would directly aid the Middle-East wireline market.
- Hence, the offshore segment is expected to dominate the market during the forecast period.
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Saudi Arabia to Dominate the Market
- The Kingdom of Saudi Arabia is one of the biggest global oil producers, with the production of 11.3 million barrels per day in 2020, according to the BP Statistical Review of World Energy 2021.
- The Kingdom of Saudi Arabia holds the second-largest proven oil reserves in the world after Venezuela. Saudi Aramco, the country's largest oil and gas company, is continuously engaged in exploration and development in order to compensate for declining fields elsewhere.
- The crude oil production rate has been consistent in Saudi Arabia, even during the distressful period in the industry, when crude oil prices plunged to a very low level in recent years.
- Oil and gas drilling activity in Saudi Arabia is anticipated to increase on account of government policy to drive the oil and gas production in the country. The policy to drive upstream activity will likely promulgate the oil and gas wireline services market in the near future.
- For instance, in November 2021, Saudi Arabian Oil company announced the development of the Jafurah unconventional gas field, where the company awarded an engineering, procurement, and construction contract worth USD 10 billion.
- Therefore, due to the above-mentioned points, the wireline services are expected to witness significant growth in Saudi Arabia during the forecast period.
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