Well Testing Services Market Size, Share & COVID-19 Impact Analysis, By Service (Real Time Testing, Downhole Testing, Reservoir Sampling, Surface Well Testing, and Others), By Application (Onshore and Offshore), and Regional Forecasts, 2020-2027

The global well testing services market size was valued at USD 7.49 billion in 2019 and is projected to reach USD 9.91 billion by 2027, exhibiting a CAGR of 6.3% during the forecast period.

Well testing services can be described as the processes involved in data acquisition to increase the understanding of the reservoir characterization and the fluid properties. Due to the increase in energy demand, there have been a surge in exploration & production (E&P) activities. New wells need to be economically viable and should be profitable enough for the companies to explore and produce. This viability check is performed by the well testing process, which is performed during all the three phases of well, i.e., exploration, development, and production. Growing demand for energy across the globe and an increase in E&P spending are significant factors driving the growth of the market.

COVID-19 Pandemic to Deeply Affect Oil & Gas Projects

The spread of Covid-19 poses a significant threat to the global oil and gas industry. According to data commissioned by the Guardian, currently, the unprecedented restrictions on travel, work, and industry owing to the coronavirus are expected to cut production by billions of barrels of oil, trillions of cubic meters of gas, and millions of tonnes of coal from the global energy system in 2020 alone. More than 15 of the world's largest public oil and gas companies by market value have announced specific cuts to their 2020 capital spending programs. Recently in April 2020, ExxonMobil Corporation announced its plan to reduce 2020 capital expenditure by 30 percent to USD 23 billion down from the previously announced USD 33 billion in response to low commodity prices resulting from oversupply and demand weakness arising from the Covid-19 pandemic.

LATEST TRENDS

Increasing Focus On Unconventional Oil & Gas Reserves to Boost the Market

The discovery of unconventional oil & gas reserves has been a significant breakthrough for the global oil industry. As per World Energy Council, the U.S. has a large amount of technically recoverable unconventional gas, i.e., 1,161 trillion cubic feet. The U.S. was the prominent country for unconventional gas, with its annual production standing at 22 trillion cubic feet in 2018. Advanced technologies are needed to extract unconventional fuels. Companies are investing significantly in research and development activities to come up with economical methods for extraction. Thus, the production of unconventional fuels is expected to rise at a considerable pace in the near future. Advanced well testing services are needed to extract these resources. Hence, the increasing production of unconventional oil and gas is anticipated to drive the well testing services market growth during the forecast period.

DRIVING FACTORS

Rise in Offshore E&P Activities to Drive Well Testing Services Market Growth

Growing population and industrial developments are fueling the global demand for energy. Global fuel consumption increased in 2018. According to BP Statistical Review of World Energy 2019, oil consumption rose by 1.4 million barrels per day, while natural gas consumption increased by 195 billion cubic meters per day. This rise in the demand for fossil fuels is prompting companies to increase their fuel production. With fewer easy-to-access oil fields remaining, oil & gas companies have moved toward new areas, including operations in more remote and deeper offshore areas. As a result, the demand for well testing service is high in deep-water E&P activities. Thus, the rise in offshore E&P activities is estimated to drive global market growth.

Growth in New Oil & Gas Discoveries to Propel this Market

Spending on oil & gas exploration rose by more than 10% in 2019. More than 80 new discoveries of oil & gas were made during the year. Off the coast of Mauritania, BP's Orca gas field was not only the largest single discovery but also the deepest-water find of 2019. It holds about 1.3 billion barrels of oil equivalent of recoverable resources. Such discoveries are expected to boost the development of wells and oil & gas production in the near future. Thus, an increase in the discovery of oil & gas fields is estimated to drive the market during the forecast period.

RESTRAINING FACTORS

Fluctuating Crude Oil Prices to Hinder Market Growth

Prices of crude oil are affected by actions that can possibly disrupt the supply of oil and gas. Geopolitical tensions are a key disruptive factor that has created uncertainty about the supply or demand for oil and gas. This can lead to higher volatility in the prices of oil and gas. The Middle East & North Africa account for a significant share of oil and gas reserves. It is a highly unstable region due to political and cultural issues. From the past few months, due to the Covid-19 pandemic, the demand for crude oil has decreased in large amounts, causing the prices of crude oil to drop. This volatility in prices affects the production of oil and gas. This will negatively impact this market growth in the coming years.

SEGMENTATION

By Service Analysis

Real Time Testing Service Dominated the Market in 2019

Based on service, the market of Well Testing Services is bifurcated into real time testing, downhole testing, reservoir sampling, surface well testing, and others. The real time testing segment held a dominant share of the market include, in 2019. Real time testing helps to monitor all the data and trends as the operation unfolds. This is used to make real time decisions, to ensure safe operations, to quality check and validate the data, and to optimize the processes, leading to less flaring and lower costs. Furthermore, companies are also investing in R&D activities to design and develop innovative well testing methods.

In terms of growth, the demand is likely to move towards surface well testing and reservoir sampling services during the forecast period to optimize well operations and the production output at minimum costs.

By Application Analysis

Offshore Segment to Grow at Faster Pace during 2020-2027

Based on application, the market is bifurcated into onshore and offshore. The onshore market segment held a dominant share of the market in 2019. In Europe, more than 11000 wells were drilled in 2018, out of which 95% of wells were onshore. Offshore segment is expected to grow at the highest pace during the forecast period. Steady depletion of onshore oil & gas fields has resulted in a shift towards offshore oil & gas. This is expected to benefit service providers involved in well-testing services. In 2018, 55 discoveries were made offshore, representing 70% of the volumes of liquids and gas discovered.

REGIONAL INSIGHTS

Geographically, the global market has been analyzed across five key regions, including North America, Europe, Asia Pacific, the Middle East & Africa, and South America. North America is anticipated to lead the global well testing services market share over the forecast period. According to the BP Statistical Review, the region was the second-largest producer of oil and the largest producer of gas in the world in 2018. The U.S. held the largest share in the North America market in 2019. According to World Oil, around 27,000 wells were drilled in the U.S. in 2018, compared to 24,000 wells in 2017.

Asia Pacific held the second-largest share of the market in 2019 and is expected to grow at the highest pace during the forecast period. The Asia Pacific region is the net importer of energy and the most rapidly growing consumer of crude oil and natural gas. This has resulted in a significant rise in expenses on crude oil imports of the region.

Latin America and the Middle East & Africa are also expected to contribute significantly during the forecast period. In 2018, Latin America was the top region as regards discoveries, with 24% of the global volumes discovered, i.e., 2.1 billion barrels of oil equivalent, mainly as a result of the major oil discoveries made in Guyana. The market in Europe is expected to grow at a steady during the forecast period.

KEY INDUSTRY PLAYERS

Key Participants are Concentrating on Increasing Their Presence and Signing New Contracts

The global market for well testing services is consolidated owing to the strong product portfolio and a remarkable global network of major companies in developed and emerging economies. Currently, Schlumberger Limited and Halliburton Inc. lead the market, accounting for a dominant share in 2019. However, strong barriers to entry, such as high capital investment, strong presence of existing key players, and loyal customer base of top players are limiting the number of domestic players entering the global market.

The companies are expanding their presence through merger & acquisition activities. Also, companies are focusing on new contracts. For instance, in August 2019, Woodside Energy BV awarded Halliburton Inc. nine conditional contracts for drilling and completion services for SNE Field Development Phase 1 offshore Senegal. The contracts awarded include drilling activity, logging, cementing, lower completions, e-line/slick line, coiled tubing, and well testing services industry.

LIST OF KEY COMPANIES PROFILED:

• Schlumberger Limited (U.S.)


• Halliburton Inc. (U.S.)


• Weatherford International Plc (Switzerland)


• Expro Group (U.K)


• TechnipFMC plc (U.K)


• Baker Hughes, a GE company (U.S.)


• SGS SA (Switzerland)


• China Oilfield Services Limited (COSL) (China)


• Oil States International, Inc. (U.S.)


• TETRA Technologies, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• In May 2021, Halliburton Inc., one of the major oil & gas service providers collaborate with TGS-NOPEC Geophysical ASA to bring advanced seismic imaging to fiber optic sensing. The collaboration will provide operators with advanced insight to define their reservoir potential for oil and gas production or carbon storage.


• In February 2020, Halliburton Inc. launched an unconventional well testing and fracture interaction monitoring technology i.e. SPIDRlive Self-Powered Intelligent Data Retriever which acquires real-time well data without the need for intervention to reduce costs and improve fracture understanding for greater recovery.


• In March 2020, Uzma Engineering, one of the major Malaysian oil and gas services providers, awarded an umbrella contract from Petronas Carigali for the provision of well-testing and tubing conveyed perforations (TCP) for Petroleum Arrangement Contractors (PACs). The value of the work order is around US$ 8.6 million.

REPORT COVERAGE

The well testing services market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, services, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

REPORT SCOPE & SEGMENTATION