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Research Outline
Prepared for Frederick N. | Delivered October 6, 2020
Saudi Arabia OCTG Market
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Goals
To find the present, past, and future dollar value of the premium OCTG market in Saudi Arabia as well as its volume in tonnes.
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Early Findings
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 consumptio
n in OCTG products is made of seamless pipes.
Despite Saudi Arabia having
built seamless mills
, it still relies on imports to meet demand.
Main providers of these products are global industry leaders such as
V
a
l
l
o
u
r
e
c
,
T
e
n
a
r
i
s
, Nippon Stee
l &
S
u
m
i
t
o
m
o
Metal.
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 Aramc
o, 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 tonn
es 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 OCT
G 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 challeng
ing in the Middle East, there is a higher requirement for premium-grade OCTG products.
Given that Saudi Arabia is one of the major oil producers globally, it is expected to be the
largest market in the region
for OCTG.
Saudi Aramco, the national company of Saudi Arabia, has announced plans to invest
USD 334 billion a
cross 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 o
f offshore wells drille
d 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
a
l
-
H
a
r
y
d
and
S
h
a
u
r
, 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 fo
r OCTG is expected to
increase during the forecast period.
World OCTG Market
The global OCTG market was valued at USD
28.9 billio
n 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.
However, countries like
China, Russia, and Saudi Arabia
are expected to grow faster owing to increased investment in the upstream sector.
Summary of Findings
The OCTG market volume in Saudi Arabia was
450,000 tonnes in 2018.
This market is expected to grow at a
CAGR of +4.2%
between 2018-2025 in the Middle East region.
Demand for premium OCTG products is expected to grow faster than API grade.
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