Surging E&P in Shale Gas Reserves Propelling Demand for Well Cementing

With the surging oil & gas exploration and production (E&P) activities, especially in unconventional reserves, owing to the recovery in the oil and gas industry, the demand for well cementing is soaring globally. This is because well cementing is a critical application area in the overall well completion process. Across the globe, the number of well completions is rising, due to the increasing E&P activities in both conventional and unconventional oil & gas reserves.

Moreover, in countries, such as China, Russia, Brazil, and the U.S., the investments being made in E&P projects are surging sharply, which is further boosting the requirement for well operations. Apart from this factor, the presence of several large offshore and onshore oil and gas reserves in the Arctic region is also creating lucrative growth opportunities for the players operating in the well cementing market. As per the United States Geological Survey (USGS), the Arctic region contains nearly 1,669 trillion cubic feet of gas, 44.0 billion barrels of undiscovered natural gas liquid, and 90.0 billion barrels of undiscovered oil.

Currently, Canada, the U.S., Russia, Iceland, Denmark, and Norway are heavily focusing on accessing the Arctic Ocean and conducting drilling activities in the region. Because of these factors, the value of the well cementing market is predicted to rise from $7,577.6 million in 2018 to $10,065.4 million by 2024 and the market is expected to demonstrate a CAGR of 4.7% from 2019 to 2024. Depending on service type, the well cementing market is divided into remedial, primary, and other services, such as advanced cementing.

Out of these, the primary category contributed around 75.0% of the market revenue in 2018. This is credited to the surge in E&P activities and the rising requirement for zonal isolation during well cementing, which is pushing up the demand for primary services. In addition, the recovery in the prices of crude oil is also predicted to fuel the advancement of the category in the well cementing market in the coming years.

The market is also categorized, based on well type, into shale gas, gas, and oil. Amongst these, the oil category dominated the market during the past few years. This was because of the huge investments that were made in crude oil E&P projects by E&P companies in recent years, mainly on account of the recovery in the prices of crude oil. This resulted in the drilling of several new wells.

Between offshore and onshore applications, the requirement for well cementing services was found to be higher in onshore applications in 2018. Geographically, the demand for well cementing services was the highest in North America in 2018, as per the observations of the market research company, P&S Intelligence. This is attributed to the surging requirement for well cementing services, on account of the huge investments that were made in the oil and gas sector, especially in well drilling applications for shale gas extraction in Canada and the U.S. in the years gone by.

Thus, the demand for well cementing will soar in the coming years, mainly because of the increasing oil & gas E&P activities all over the world.