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Artificial Lift Techbook 2016

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ARTIFICIAL LIFT TECHBOOK: OVERVIEW | May 2016 | 3 One year ago, Spears projected a 2015 artif- cial lift market of $12.5 billion, but the fall was harsher than expected, largely because oil prices kept declining. In 2009, which was the last market downturn, the artifcial lift industry fell by 16%. By the end of the current downturn, the lift market will have fallen 35%. As tough as that is, the broader oilfeld equipment and service market will fall more than 40% during the same period, and the worst segments will be down 80%. Lift is doing better than most. The use of artifcial lift is growing more intense each year. Spears uses the simple ratio of artifcial lift market dollars to total new wells drilled each year to quantify this growing intensity of use. As the "Artifcial Lift Spending per New Well" chart shows, the amount of money spent on artifcial lift each year per new well drilled has grown from just $50,000 per new well in 2005 to greater than $300,000 in 2016. The trend has been developing for decades, and Spears expects it to continue far beyond 2020, when the ratio will approach $500,000 per new well drilled. The artifcial lift market is highly depen- dent upon sales of replacement pumps to wells that were drilled over the last 50 years, $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Global Artifcial Lift Market (billions) $- $50 $100 $150 $200 $250 $300 $350 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Artifcial Lift Spending per New Well Drilled (thousands) Schlumberger Baker Hughes Weatherford GE Oil & Gas Dover Corp. BORETS Novomet Cameron Summit ESP John Crane NOV Halliburton Tenaris Others 2015 Market Shares Rod Lift ESP PCP Hydraulic Gas Lift Plunger Other 2015 Lift Type Shares

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