The global oilfield equipment rental market will grow from an estimated $26.8billion this year to $53.7billion by 2019 with a CAGR of 14.9% over the five-year period, according to US research. The revenue for OER last year was $23billion.
The main driving force behind the considerable compound annual growth rate is the current drilling boom worldwide.
However, overall, the global oilfield rental equipment market is projected to exhibit high growth based on the multiple assumptions of rising oil and gas prices and increased exploration & production activity, all fuelled by burgeoning demand for energy.
North America accounts for the largest share of the market, followed by Asia-Pacific and Europe & Eurasia.
In terms of individual countries, the market is dominated by US on account of its flourishing shale drilling market.
Africa is forecast to deliver the highest CAGR during the next five years due to an increase in offshore E&P activities. But the ebola crisis might wreck that calculation.
Asia-Pacific will be driven by increasing drilling activity too, especially in Australia, China, Russia and India.
South America is being powered along by Brazil’s burgeoning deepwater sector.
OER is a highly developing market despite having a large base.
But it is also a very fragmented industry and offers opportunities for consolidation, hence significant M&A activity.
Most oilfield equipment is now so expensive that many companies rent rather than buy; and many rental firms base their business on local rather than international markets.
Renting provides significant savings over capital investment and helps in curtailing the inventory costs as well as the infrastructure to store the same.
It also minimises downtime, and hence the capital can be utilised for more profitable ventures.
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