Al-Rajhi: Cabinet's decision is supportive to most vulnerable groups    King Salman appoints Dr. Majid Al-Fayyad as Royal Court advisor    Alkhorayef emphasizes Saudi Arabia's growing role as global industrial investment hub    Saudi Arabia adopts World Drowning Prevention Day as national health priority    Saudi defense minister and Iranian FM discuss regional developments    GACA imposes SR2.8 million in fines for 87 civil aviation violations in Q2 2025    Desperate Gaza doctors cram several babies into one incubator as fuel crisis reaches critical point    ICC issues arrest warrants for Taliban leaders over women's rights violations    Syria issues appeal to EU for help battling massive wildfires along northwestern coast    Total e-messages sent to parties in lawsuits reach over 11.8 million during first half of 2025    3 arrested in assault case in Riyadh    New Property Ownership Law will take into effect in January 2026 Al-Hogail thanks King and Crown Prince for the updated law    HONOR returns to Esports World Cup as Official Smartphone Partner for 2025 The renewed commitment will see HONOR elevate mobile esports competition with cutting-edge AI technologies and industry-leading hardware    Riot Games responds to match-fixing allegations in VALORANT    BLAST responds to BESTIA Visa controversy ahead of CS2 Austin major    Christophe Galtier named NEOM SC head coach ahead of historic Saudi Pro League debut    Michael Madsen, actor of 'Kill Bill' and 'Reservoir Dogs' fame, dead at 67    BTS are back: K-pop band confirm new album and tour    Michelin Guide launches in Saudi Arabia with phased rollout in 2025    'How fragile we are': Roskilde Festival tragedy remembered 25 years on    Sholay: Bollywood epic roars back to big screen after 50 years with new ending    Ministry launches online booking for slaughterhouses on eve of Eid Al-Adha    Shah Rukh Khan makes Met Gala debut in Sabyasachi    Pakistani star's Bollywood return excites fans and riles far right    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Oilfield service purchases set to lose $340 billion until 2028
Published in The Saudi Gazette on 03 - 12 - 2020

The oilfield service (OFS) market is projected to lose a cumulative $340 billion in purchases value over the next eight years, a Rystad Energy analysis shows, as peak oil demand will arrive earlier and at a lower level than previously thought, leading to reduced E&P investments.
The COVID-19 pandemic's effect and the accelerating energy transition last month impelled Rystad Energy to revise its peak oil demand forecast. We now see it coming in 2028, two years earlier than previously expected, at 102 million barrels per day, down from earlier projections of 106 million barrels per day.
OFS purchases are expected to drop to $473 billion this year from $625 billion in 2019 and remain flat in 2021 before starting a slow recovery.
Based on our updated peak oil demand forecast we now see OFS purchases returning to pre-pandemic levels only after 2024 in nominal terms, reaching $642 billion in 2025. In real terms, excluding the impact of price inflation, annual purchases are not expected to revisit pre-pandemic levels this decade.
The $340 billion of lost purchases value is spread across the coming eight years and is calculated as the cumulative difference between the current and the previous outlook for peak oil demand, which corresponds to a 6% drop.
We now expect investments to increase by 13% in 2022 (versus 17% previously) and 16% in 2023 (18% previously). Most of this downward revision is driven by shale investments, which previously were expected to grow by 45% in 2022 and now are pegged at about 30% growth.
Shale operators have been hit hard of late, and they also harbor ambitions to generate better cash flow by reducing their investment ratio. Growth in the offshore segment is revised down from 12% in 2022 to only 9%.
"With a lower need and willingness among E&P companies to invest in oil and gas, capital expenditure across offshore, shale and conventional onshore resources will probably struggle to get back to 2019 levels," said Audun Martinsen, head of energy service research at Rystad Energy.
In nominal terms, offshore investment levels are projected to return to 2019 levels in 2023, with conventional onshore following suit in 2025 and shale in 2028. In real terms, however, investments in upstream oil and gas may never make it back to 2019 levels, Martinsen added.
Service purchases are trading the same way. Even when including operational budgets in the oilfield service market, there is little reason to expect a return to 2019 levels anytime soon. In real terms, this is not likely to happen at all this decade, whereas in nominal terms it could be achieved by 2025.
The service market is now estimated to grow at a compound annual rate of 7.9% from 2020 to 2025, compared to 10.4% in previous forecasts. The biggest revision to service purchases comes from the EPCI segments, where lower sanctioning activity has had a negative impact, but segments related to wells have also suffered due to the slowdown in the shale sector. — Rystad Energy


Clic here to read the story from its source.