2017: Upstream Oil and Gas equipment market overview.

Eugene Pribytkov
Jul 10, 2017 · 3 min read

2016

In 2016, the global oil and gas (O&G) industry experienced sustained low crude oil prices and slow price gains, culminating in a major production cut agreement among members of the Organization of Petroleum Exporting Countries (OPEC) as well as non-members in November 2016. The coordinated production increased the international price of crude oil to around $50 per barrel.

2017

2017 and 2018 to be a buyers’ market for crude oil and natural gas as global production appears to be outpacing demand growth.

The modest increase in crude oil prices that resulted from OPEC’s coordinated production cut, have not trickled down to natural gas, and prices remain low in a well-supplied international market.

Global Industry Landscape

The international O&G equipment market is dominated largely by five countries: Korea, China, Germany, United States, and Japan.

excluding U.S.

The exports profile of these countries are characterized by a heavy manufacturing for the ships and offshore platforms in Korea, low cost inputs originating from China, and high-tech components and advanced manufacturing from the United States, Germany, and Japan.

In 2015, Korea was the world’s largest O&G equipment exporter, exporting $36 billion to global markets, while China and Germany were the next largest O&G equipment exporters to the world with $29 billion and $25 billion in exports, respectively.

Other countries:

Summary of country case studies by International Trade Association (2016)

Market of O&G services

We have to take into consideration market of oil and gas services as well. It is estimated even bigger than market of equipment and compromise approx. 200 billions (USD) by 2017.

Market of non-critical products and services

Suppliers of non-critical items and services can be estimated as approx 20% from all market value, that gives us around 70 billions (USD) annually. It is a huge market which have to be well known and unleashed at first to improve overall oil and gas global business environment.

petrohub.com

As an example of already evolved B2B collaboration in the Oil and Gas sector, there is a Norwegian company who provides sales services via digital procurement platform — PetroHub, that gives international Buyers a greater reach to qualified suppliers as well as contract and G&A savings in procurement. That could be a good indicator of closer and streamlined collaboration between the parties in the global petroleum industry.

Projections

http://trade.gov/topmarkets/pdf/Oil_and_Gas_Top_Markets_Report.pdf

In the years ahead, International Trade Association (ITA) projects global trade in O&G equipment to increase as higher oil prices result in increased investments. As a result of the decreased global price of oil that began in late 2014,overall global trade of oil and gas equipment and services declined in 2015 and 2016. ITA anticipate higher global trade in 2017 as a result of higher global oil prices from the OPEC production cut, but this effect will not be seen in trade statistics until 2018 at the earliest.


Eugene Pribytkov

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The modern face of the Energy industry.

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