OCTG comprises major product segments, and the future scenario is going to run on multi-channels across the continents. The overall valuation of the OCTG or Oil Country Tubular Goods market stood at $377.07 million in 2020.
The current state of the global OCTG industry largely focuses on the key drivers, global competition, regional parameters and industry challenges. However, the drivers and challenges of the OCTG market are largely dynamic in nature.
OCTG Market: Drivers And Challenges
As per the US Energy Information Administration, global energy consumption is expected to increase by over 50% by 2050. The rising demand is set to be fuelled by nations in the Asia Pacific, the Middle East, Africa, and Latin America.
Fossil fuels will continue to remain the major source of energy till 2050. This means demand for Oil Country Tubular Goods will also stay relevant.
The increased production in the Middle East due to advancements in drilling and well logging technologies also remains a major contributing factor for the oil and gas industry.
Key Market Drivers
The OCTG market is largely governed by innovations and advancements in the drilling infrastructure which makes it a key market driver for the industry. The depleting onshore resources in major producing regions have also fuelled a hunt for new technologies as well. This allows the companies to search and extract more resources.
There comes a revolutionising change in the overall industry dynamics once a new technology enters the picture. This happens as all the key players rush to update themselves to match the latest standards. The emergence of new competitors in the market is also a major driver for the onshore and offshore drilling industry.
Key Market Challenges
The current instability on the political and economic fronts across nations is one of the major challenges for the Oil Country Tubular Goods market which also includes the entire petroleum industry. The international market is not similar to the domestic market. It is filled with incontinence due to the larger involvement of factors like,
- Financial and market risks
- Political challenges
- Cultural practices
- Legal instabilities
- Safety and environment parameters
- Fluctuating exchange rates
- Labour risks
- Policies of the national government, and many more.
The tussle between OCTG competitors often fuels price wars. This poses a major challenge for the existing as well as new players in the Oil Country Tubular Goods market.
OCTG Market: By Competitors
Looking at the numerous major providers ruling the global market for OCTG goods, it’s impossible to settle for one industry leader. There are several sought after players who are really established in the OCTG market. It supplies steel welded pipes and associated services for hydrocarbon exploration and similar industrial exploration.
The major OCTG providers are:
- US Steel Corporation
- National Oilwell Varco
- JEE Steel Corporation
- Sumitomo Corporation
- SB International
- EVRAZ North America.
An interesting fact to note here is that the market share of these companies is highly inconsistent due to the everlasting competition in the industry.
OCTG Market: By Regions
The OCTG market geographic segmentation is inclusive of key regions like,
- North America
- Latin America
- Asia Pacific
- The Middle East
Recent policy shifts in major regional players like Brazil have ignited tremendous interest in oil and gas exploration and production in the country.
The increasing reserves of oil and gas in the regions of the United States is also a major triggering factor that has sparked the price wars among key industry players in the region.
Major Product Segments In The OCTG Market
The casing is an integral component in drilling and well logging. It aids in avoiding the contamination of groundwater and also provides stability for uninterrupted drilling. Apart from supporting the wall of the well, it prevents the well from collapsing.
However, the OCTG product segmentation is inclusive of several aligned products with the OCTG, i.e., electrical wires, water tubing, seamless pipes, and pull cables.
The concept of a fully-fledged e-marketplace for OCTG goods has positively welcomed such product diversifications. Thereby allowing OCTG buyers and sellers to conduct business-to-business transactions efficiently.
- The ever increasing demand for energy is the primary cause behind the attractiveness of the oil and gas exploration and production industry.
- Looking at the current pace of innovations and mass scale revamping, it can be comfortably stated that the OCTG industry is set to undergo a revolution in the coming years.
- Major nations like the US, Brazil, Mexico, etc., serve as the economic driving force for the oil and gas industry and the OCTG demand. Therefore, the OCTG market is looking towards a brighter future despite the multiple challenges and instabilities.