The global oilfield service sector’s recovery from the deepest trough it has ever encountered is not going to happen overnight.
Not until 2025, 11 years after the last peak, are global service market revenues again likely to have made it back to the $920 billion mark seen in 2014, according to Rystad Energy.
“This will be the longest slump faced by the oilfield service industry since the 1980s, with about $2.3 trillion in revenues lost along the way,” says Audun Martinsen, Rystad Energy’s head of oilfield service research.
“On the bright side, in only three years’ time, activity levels will be higher than they were in 2014, although the cost cuts achieved in the sector means spending levels will only be 80% of what was seen in that peak year.”
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The recovery will be spread unevenly between the segments.
“As for the offshore market, we expect recovery to be slower than for onshore and North American services. The offshore market bottomed out in 2018, and it will take some time to turn around fully, as capital investments are ramping up slowly and some cost efficiencies have yet to be realized,” Martinsen said.
“Offshore drillers and seismic contractors are the last segments expected to return to their former glory, as recovery is slowed by a multiple factors – a supply overhang, higher drilling efficiency, low utilization and scant interest in exploration,” Martinsen remarked.
Head of Oilfield Service Research
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About Rystad Energy
Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. Our products and services cover energy fundamentals and the global and regional upstream, oilfield services and renewable energy industries, tailored to analysts, managers and executives alike. Rystad Energy’s headquarters are located in Oslo, Norway with offices in London, New York, Houston, Stavanger, Moscow, Rio de Janeiro, Singapore, Bangalore, Tokyo, Sydney and Dubai.