- March 23, 2015
Continuously declining oil prices-hitting a 4-year low-have forced the oil extraction companies to optimize their spending by increasing efficiency. In line with this, the companies are increasingly deploying artificial lifts to increase output from the existing wells. As a result, the artificial lift market is expected to pick pace in next two years.
According to a new report by Allied Market Research entitled, "Global Artificial Lift Market - Size, Industry Analysis, Trends, Opportunities, Growth and Forecast, 2013 - 2020", the global artificial lift market is expected to reach $27.3 billion by 2020, registering a CAGR of 10.5% during 2014-2020. Continuously declining oil prices-hitting a 4-year low-have forced the oil extraction companies to optimize their spending by increasing efficiency. In line with this, the companies are increasingly deploying artificial lifts to increase output from the existing wells. As a result, the artificial lift market is expected to pick pace in next two years.
As a result of geopolitical consequences, oil prices have declined drastically in past one year. The oil prices have reached below the half of the value they had about a year ago, thereby, affecting profitability of oil extraction and processing companies. In an effort to meet business targets with fiscal constraints, companies are restraining themselves from investing in new projects. The only feasible alternative to increase production would be achieved by increasing output efficiency. Artificial lift is emerging as a solution to this problem, which ensures the maximum efficiency and optimum utilization of oilfield resources.
Among the different types of artificial lifts, the rod lifts are the most preferred ones, due to their cost-effective performance while extracting oil from ultra-deep oil fields. Plunger lift technology is gaining an increasing traction in the market due to lower maintenance cost and their ability to operate at sites with mixed proportions of oil and gas. The gas lift components, such as valves and mandrels, would experience rapid increase in adoption by 2020 with the increase in adoption of high-performance gas lifts. North America drives the market due to the growing need of artificial lifts in order to extract oil from low-pressure oil wells in the region.
Key findings of the study:
- The global market for artificial lifts would grow at a CAGR of 10.5% during the forecast period (2014-2020), due to increased adoption resulting from increased demand of energy sources and maturing oil fields
- Plunger lifts would witness rapid market growth, growing at a CAGR of 18.2% during forecast period
- Rod lift would be the market-driving technology by 2020, contributing more than 1/3rd of the overall market revenue
- Asia-Pacific would prove to be one of the most lucrative markets, in terms of growth, growing at a CAGR of 13.2% during 2014-2020
The market growth is attributed to launch of new artificial lift systems along with business offerings such as service management, on-lease sale, etc. Weatherford has taken a lead in the rent business of artificial lift components. Furthermore, in order to gain a higher market share, the companies are adopting acquisition and partnerships as key strategies. For example, Schlumberger has acquired Kudu Industries in May 2014. This acquisition would be beneficial for Schlumberger, which would improve the supply of pumps, a key component of artificial lift system. Prominent companies profiled in the report include Halliburton, Weatherford, GE Energy, National Oilwell Verco, Dover Corp. and Tenaris.Learn More
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