To find the present, past, and future dollar value of the premium OCTG market in Saudi Arabia as well as its volume in tonnes.
Saudi Arabia/GCC OCTG Markets
The Saudi Arabia market for OCTG products represented 450,000 tonnes in 2018.
In the Gulf Cooperation Council (GCC), which includes 6 member states, including Saudi Arabia, Oman, Kuwait, UAE, Qatar, and Bahrain, 90% of their consumption in OCTG products is made of seamless pipes.
In 2018, the GCC had to import over double its production of seamless pipes, with 900,000 tonnes, compared to only 400,000 tonnes produced locally.
Given that oil companies in the GCC, including Saudi Aramco, are drilling in sour gas fields, it is expected that the demand for high alloy grades of OCTG over the next five years would grow.
OCTG consumption in the GCC region was expected to reach 1.33 million tonnes in 2019 and 1.36 million tonnes in 2020.
The OCTG market was expected to grow at a CAGR of +4.2% between 2018-2025 in the Middle East region.
OCTG Market Drivers
In the Middle East, demand for premium OCTG products is expected to grow faster than API grade due to a variety of characteristics specific to the oil and gas production and exploration in the region, which include: an increasing focus on gas wells, horizontal wells, high pressure (above 5,000 psi) and high temperature (above 250 F) wells.
As the upstream operational environment is harsher and more challenging in the Middle East, there is a higher requirement for premium-grade OCTG products.
Saudi Aramco, the national company of Saudi Arabia, has announced plans to invest USD 334 billion across the oil and gas value chain by 2025, with major contributions in Saudi Arabia in the exploration of new fields and the expansion of existing oil and gas fields.
In Saudi Arabia, the focus of exploration has increasingly shifted toward the offshore Red Sea and onshore unconventional. The number of offshore wells drilled in the country has increased, which has further increased the demand for OCTG in the region.
In 2019, exploration drilling in Saudi Arabia yielded two significant discoveries, including al-Haryd and Shaur, a shallow-water gas finds. Thus, there is huge potential for offshore drilling services in the country, owing to the increase in the number of discovered offshore fields.
Moreover, over the years, the country has been taking initiatives to increase its upstream oil & gas capabilities, especially with regard to drilling equipment and services. Hence, the market for OCTG is expected to increase during the forecast period.
World OCTG Market
The global OCTG market was valued at USD 28.9 billion in 2018 with a global production volume of 15,100.21 Thousand tonnes.
Among the regions, the Americas is the largest market thanks to major investments planned in offshore deep water and ultra-deep water drilling activities, as well as a growing number of oil and gas wells as well as exploration of shale resources.