FAVERSHAM, UK – The current downturn in the oilfield services business and the approach of the major swing producers is expected to have a marked effect on the global oilfield services (OFS) market through to 2019, according to the third quarterly edition of Douglas-Westwood’s (DW) World Oilfield Services Market Forecast 2015-2019.
With the downturn in the market, total OFS expenditure over the forecast is expected grow at a CAGR of 7%, a figure that is down compared to the 12% seen over 2010-2014.
DW says its offshore OFS forecast, driven by DW’s in-house Offshore Oil & Gas Database, is generally less affected by oil price decline – particularly in the short term.
However, expenditure has been hit by service price deflation with OFS spend expected to fall by 11% in 2015. In the long term, DW expects there to be a lagged effect from the commodity price downturn as a result of delays to final investment decisions (FID) on new projects.
Consequently, offshore OFS expenditure will see activity driven decline post-2016 before an uptick in 2019 – though this will not be significant enough to bring spend back to 2015 levels.
Overall, depressed oil prices, day rates, and US onshore drilling activity cast a significant shadow over the global OFS sector. While some services may benefit from sustained activity in the Middle East, DW says that the industry as a whole is suffering and faces a gradual recovery rather than a sudden bounce-back in activity.