DW analysis sees oilfield service expenditures declining, followed by gradual recovery

Offshore staff

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.


Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Making DDoS Mitigation Part of Your Incident Response Plan: Critical Steps and Best Practices

Like a new virulent strain of flu, the impact of a distributed denial of service (DDoS) attack is...

The Multi-Tax Challenge of Managing Excise Tax and Sales Tax

To be able to accurately calculate multiple tax types, companies must be prepared to continually ...

Operational Analytics in the Power Industry

Cloud computing, smart grids, and other technologies are changing transmission and distribution. ...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...