Artificial lift is the process used on oil wells so as to increase the pressure in the reservoir and help push the oil in the reservoir to the surface. When the natural energy within the reservoir is not strong enough to push the oil to the surface, an artificial lift system is used to recover more resources. Some wells have enough pressure for oil to rise to the surface without stimulation, whereas many do not have this natural pressure thus necessitating the use of an artificial lift. In fact, a large part of the oil wells in the US require artificial lift from the very beginning. Even the wells that initially possess natural flow to the surface, this pressure may naturally deplete over a period of time, after which employing an artificial lift is needed. Therefore, artificial lift is generally performed on all wells at some time during their production span.
Artificial Lift Market Outlook
- Global oil prices, which are currently witnessing a sort of slump, are set to recover in the coming quarters. This would result in exploration and production activity picking up resulting in a consequent growth of the artificial lift market.
- Economic growth in the emerging regions is in an uptick phase meaning it is growing rapidly across sectors. This would result in increased energy requirement to fuel this growth. Further, economic self-sufficiency by reduction of imports is also high on the agenda of these economies. These factors would result in a growth of the artificial lift market in the region as a result of increased domestic oil & gas activities.
- Widespread extraction from onshore and shallow water reserves over the years has led to depletion of the resources in them. This has led to an increased level of activity in deep water reserves. Thus, the depleting onshore and shallow water reserves would necessitate the use of artificial lift systems to extract the last remaining fluids before the production facility can be decommissioned.
Artificial Lift Market Regional Highlights
- North America held a majority of the market share in value terms in the artificial lift market in 2019. This can be attributed to the rapid activity witnessed in the last few years in the US oil and gas industry. Europe came in second owing to large scale oil and gas exploration and production activity in the North Sea region.
- Asia Pacific would exhibit the strongest growth over the forecast period from 2020 to 2026 owing to the developing nature of the economies who are seeking to reduce import dependence for their energy requirements thereby increasing domestic production of oil and gas. Further, growing investments in upgrading oil and gas infrastructure would also be seen in the region.
- The volatile nature and uncertainty in the geopolitical scenario of some Latin American and Middle Eastern countries would affect the production and transport of petroleum products among others thereby acting as a headwind for the growth of the artificial lift market in the region.
Artificial Lift Market Segmental Overview
- Electric submersible pump systems use a centrifugal pump at a level below that of the reservoir fluids. The pump which is connected to an electrical motor, has many impellers or blades which make the fluids within the well. This works by pressurizing the fluid and thus pushing it to the surface as a result of the action of the impellers in the reservoir.
- The pump mechanism of artificial lift engages the equipment on and below the surface which causes an increase in the pressure and pushes the oil to the surface.
- Given the depleting onshore and shallow water resources, the last few years has seen a lot of exploration and production being conducted offshore and even in deep waters where no activity has been carried out before. This would result in a rise in the demand for artificial lift services from the offshore application over the forecast period.
- Growth of the oil and gas sector over the years driven by rising energy demand from the emerging regions presents bright growth prospects for the artificial lift market.
Artificial Lift Market Key Players
The major companies operating in the artificial lift market include AccessESP, Baker Hughes, a GE Company LLC, Borets International Limited, Dover Corporation, Flotek Industries Inc, Halliburton, JJ Tech, John Crane, National Oilwell Varco, OILSERV, Schlumberger Limited, SPOC Automation, and Weatherford among others.
The research and development into updating the current range of products and integrating the newer ones is expected to catch up in a big way in the years to come. This trend would further intensify due to greater adoption in hitherto untapped geographies such as those in the Asia Pacific and Latin America where exploration and production activities are picking up in a big way. Thus, geographic expansion and product & process innovation would be the key focus area for the major players.