02 February 2018, London — Oilfield services (OFS) companies around the globe will face a stronger demand for their services in 2018, according to a new report from BMI Research.
Oil and gas analysts at BMI believe that recovering onshore activity in the U.S. will boost demand for drilling and completion services this year, and expect recovering markets outside the U.S. to further support OFS in 2018.
“As some of the industry’s most vulnerable companies to the fall in crude prices, rising commodity prices and strengthening demand for onshore services is reviving this sector after a three-year contraction,” BMI analysts said in a statement sent to Rigzone.
“Having retired or pulled back from a number of segments since 2014, we expect OFS firms will redeploy assets into the field this year as investment activity begins to recover,” the analysts added.
In the report, BMI highlighted that the rise in crude prices had already boosted revenues at the top global OFS companies, as upstream developers increase spending.
“At Schlumberger and Halliburton, Q4 17 revenue rose by 15.1 percent year-on-year, 47.7 percent year-on-year, respectively,” the analysts stated.
Outside of the U.S. BMI analysts expect a pick-up in activity along the Atlantic Margin surrounding Latin America and West Africa, as majors return to high-impact exploration to support reserve replacement.
“However, we caution that global activity will rise at a more modest rate outside of the U.S. given longer lead times and higher breakevens at many conventional projects. This will leave more slack in the international OFS market, thereby limiting cost inflation over the course of the year,” the analysts said.
*Andreas Exarheas – Rigzone