Casing Centralizer Market Size, Share & COVID-19 Impact Analysis, By Type (Bow Spring Centralizer, Rigid Centralizer, Others), By Material (Steel, Aluminum, Others), By Application (Onshore, Offshore), and Regional Forecasts, 2022-2029

The global casing centralizer market size was valued at USD 351.1 million in 2021. The market is projected to grow from USD 388.4 million in 2022 to USD 659.6 million by 2029, exhibiting a CAGR of 7.9% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with casing centralizer experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global casing centralizer market exhibited a decline of -32.2% in 2020 as compared to 2019.

A casing centralizer is a mechanical device placed at various points around the casing to hold it in place and prevent the casing from touching the borehole walls. Due to casing centering, a continuous annular gap around the casing allows the cement to completely seal the casing against the borehole wall.

Piping centralization is one of the key elements to ensure the quality of a cementing job by preventing mud channels and poor zone isolation. Centralizers can also support the case and prevent the differential from binding.

COVID-19 IMPACT: 

Decreased Petroleum Consumption Amid the Pandemic Hindered Market Proliferation

The COVID-19 pandemic and related economic repercussions have significantly impacted the market. Further, its effect on the oil and gas industry could adversely affect liquidity, consolidated results of operations, and consolidated financial condition. In 2020, oil demand significantly deteriorated due to the virus outbreak and government regulations implemented worldwide to mitigate the virus's spread. Physical markets became distressed as lack of available storage capacity negatively impacted spot prices.

According to NCBI, the short‐term impact was a nearly 25% decrease in petroleum consumption, slowly recovering to its former and growing more. The long‐term effects are a 30% to 40% decrease in the CAPEX and R&D investments in the offshore oil and gas market, which has directly impacted the market forecast.

LATEST TRENDS:

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Government Initiatives to Meet Increasing Demand for Oil and Gas to Elevate Market Growth

Increasing government investment in new oil and gas reserves creates new growth avenues in the market. Moreover, projects are being launched in several regions to meet the increasing demand for crude oil, further increasing the demand for drilling equipment and centralizers.

In 2020, Egypt announced an investment of USD 1.4 billion for oil and natural gas exploration in nine new locations in the Mediterranean Sea and the Red Sea. The state Department of Petroleum and Natural Resources announced the news and expected to drill 23 new wells in both seas.

Additionally, oil and gas exploration has been growing steadily due to economic development and technological advancement, pushing the demand for drilling and well-cementing equipment, including casing centralizers. Furthermore, international and local government policies are impacting the evolution of the oil and gas market, mainly focusing on the eradication of hydrocarbon poverty, majorly in developing countries.

DRIVING FACTORS

Increased Drilling Activities to Boost Product Demand

Rising onshore and offshore oil & gas exploration activities are increasing the demand for centralizers across the globe. The rising adoption of centralizers in oil fields ensures the quality of drilling and cementing due to their robust structure and durability, saving production costs and ensuring drilling quality. The primary function of the centralizer is to hold the cement between the casing and the maintenance of the wall. Centralizers are incredibly lightweight and have non-corrosive properties that aid in maintaining tubing and drilling products. Moreover, it is used to prevent the casing from contacting the wellbore while at the same time providing good clearance around the casing to aid in the cementing operation.

The significant growth rate of the international crude oil market is influencing the global upstream oil and gas sector to regularly change the frequency of production and operation, which has led to increased drilling activities along with the installation and replacement of arc spring casing centralizers. According to the U.S. Energy Information Administration (EIA), 98.8 million barrels per day (b/d) of petroleum and liquid fuels were consumed in July 2022 across the world, which is 0.9 million b/d higher from July 2021.

Increasing Shale Gas Drilling to Elevate Product Demand Worldwide 

Shale gas is a natural gas explored by multi-stage hydraulic fracking and horizontal drilling from shale rock or underground reservoirs. According to the IEA Shale Gas Report, shale gas reserves are found worldwide in sizable amounts of about 16,103 trillion cubic feet. China has become the largest shale gas producer globally since 2005, with 1,115 trillion cubic feet in 2022, followed by Argentina, Algeria, and the U.S.

The production of natural gas from shale continues to increase in North America, and shale gas exploration is rising in other parts of the world. The U.S. is highly developed in shale gas production and has been an annual net exporter of natural gas since 2017. Companies are likely to invest heavily to meet the growing demand for oil and gas. Companies use various techniques to increase the production of existing oil wells and explore new wells to achieve maximum performance. As per U.S. Energy Information Administration (EIA), U.S. dry shale gas production was about 26.8 trillion cubic feet (Tcf), equaling about 79% of total U.S. dry natural gas production in 2021. Furthermore, shale exploration for oil, condensate, and gas has greatly expanded its significance as an "unconventional" petroleum reservoir.

RESTRAINING FACTORS

Fluctuating Crude Oil and Natural Gas Prices Hampered Market Augmentation

Oil is a commodity that tends to experience more significant price fluctuations than other stable assets such as stocks and bonds. Oil prices are influenced by various factors, most notably production decisions made by OPEC, independent petro states such as Russia, private oil exploration companies such as ExxonMobil, geopolitical events, and awareness about environment-friendly energy solutions. Therefore, the decreasing demand for crude oil and natural gas would directly affect production, impacting the market negatively as casing centralizers are used to cement oil well bores.

Due to growing concerns about environmental pollution, various governments across the globe have implemented multiple regulations and policies to reduce vehicle emissions. Countries such as China, the U.S., Germany, France, Norway, and the United Kingdom have established certain targets for the deployment of electric vehicles, with plans to phase out Internal Combustion Engine (ICE) vehicles. Thus, increase in the usage of electric vehicles is expected to hamper oil & gas demand, thereby affecting the market growth during the forecast period.

SEGMENTATION

By Type Analysis

Bow Spring Centralizer to Dominate Due to Extensive Application in Oil & Gas Exploration 

Based on type, the market has been segmented into bow spring centralizer, rigid centralizer, and others. The bow spring centralizer is effective on vertical and slightly deviated wellbores to center the casing in the wellbore, thus improving cementing efficiency. The demand for bow spring centralizers is increasing as they are extensively used in oil & gas exploration and production processes. Furthermore, bow spring centralizers generate a retraining force using flexible bows that help in providing separation between the wellbore and casing.

Rigid centralizers are made from cast aluminum or steel as their diameter is smaller than the drilled hole, so the solid rigid centralizers are strong and work well in deviated drill holes. Moreover, rigid centralizers are robust and work efficiently in deviated boreholes, regardless of lateral force. Constructed of cast iron or solid steel bars, this type of centralizer has a fixed blade height and is sized to fit a specific case or hole size.

By Material Analysis

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Steel Casing Centralizers to Lead Owing to its Lower Price & Efficiency

Based on material, the market is segmented into steel, aluminum and others. The steel segment dominates the market as steel centralizers are made of heavy alloy steel, which is comparatively cheaper than aluminum centralizers and can also withstand high axial loads as it is designed for vertical, highly deviated, and horizontal wells. The sturdy welded rigid centralizer can provide constant casing support, while the circular blade can reduce the torque and resistance of the casing during operation.

The aluminum segment is growing at a reasonable rate due to its lightweight nature, which is almost one-third of the weight of steel centralizers. In addition, a rigid centralizer is made of high-strength, corrosion-resistant cast aluminum or aluminum alloy. An aluminum centralizer can be used with corrosion resistant alloy housing strands to avoid the effects of galvanic corrosion.

By Application Analysis

Onshore Application Segment to Lead Stoked by Increased Exploration and Production Activities

By application, the market is bifurcated by onshore and offshore. The onshore segment accounts for a large part of the increased exploration and production activities in onshore oil and gas fields. Onshore drilling accounts for 78% of worldwide oil and gas production. Onshore application of casing centralizers is expected to increase at a CAGR of 8.4% during the forecast period.

Offshore segment is also growing rapidly at a CAGR of 6.93% over the forecast period. Electric demand is growing with increasing urbanization and industrialization across developing economies. Electricity production requires high-volume fossil fuels, which drives the offshore drilling market trends and results in drilling more wellbores.

REGIONAL INSIGHTS

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Shale Gas Exploration Activities in North America Drives the Market Across the Region

North America accounts for most of the global casing centralizer market share. Growing demand for hydrocarbons from the power generation and transportation industries is likely to push the demand across the region. Additionally, ongoing shale gas exploration and production activities in North America drive the market. The market is also driven by significant unconventional resource growth in the U.S. and Canada across onshore and offshore fields.

The Asia Pacific region is the fastest growing region as Asia is still heavily reliant on oil and gas, which has been boosted by growing natural gas consumption. Europe and the Middle East & Africa regions are growing at a moderate speed. However, both regions have high oil and gas consumption, especially in the automotive and energy-generating sectors. Furthermore, besides holding nearly half of the world's crude oil reserves, the Middle East is also home to abundant natural gas resources. The region accounted for more than 40% of the world's total natural gas reserves.

KEY INDUSTRY PLAYERS

Key Participants are Concentrating on Enhancing their Product Capacities

The global market of casing centralizer is at a saturation point, with many players providing their products to various onshore and offshore industries. Numerous players are actively operating across the globe to cater to the increasing oil & gas demand.

Major casing centralizer players, including Haliburton, Weatherford, and National Oilwell Varco (NOV) also operate in the market. Weatherford is anticipated to lead the industry with a long-standing presence and robust product offerings in the forthcoming period. Furthermore, many players operating in the industry are focused on delivering advanced solutions with components upgraded to cater to the growing demand for oil and gas.

LIST OF KEY COMPANIES PROFILED:

• Halliburton (U.S.)


• Weatherford (U.S.)


• Summiot Casing Equipment (U.S.)


• NeOz Energy (India)


• Maxwell Oil Tools Ltd. (Italy)


• Equip Outlet Inc. (U.S.)


• NOV (U.S.)


• Centek (U.S.)


• Amroc Bremse (India)


• Avantgarde Oil Services Limited (Russia)

KEY INDUSTRY DEVELOPMENTS:

• August 2022 - Halliburton Labs announced that it selected three new companies to participate in its collaborative environment program to advance a cleaner, affordable, and reliable energy. As Halliburton Labs participants, AW-Energy, RedShift Energy, and Renkube will receive access to a broad range of industrial capabilities, technical expertise, and mentorships to scale their respective businesses.


• July 2022 - The Halliburton Company introduced the new Hedron platform of fixed Polycrystalline Diamond Compact (PDC) drills. These drills combine the latest technology with an industry-leading customization process to deliver high-performance, application-specific designs for customers.


• August 2022 - NOV has won the Non-Drilling Contractor - Best Safety Initiative Award for 2021 from IADC - Southern Arabian Peninsula Chapter (IADC-SAPC) for the "Make It Right" program. The award recognizes a comprehensive safe work system that aims to implement superior controls and contemporary health and safety management approaches in the southern Arabian Peninsula.


• July 2022 - NOV started developing the Max Platform a few years ago to create a flexible system that can easily interface data sources and convert data into useful information. GustoMSC started developing the Operator Support System (OSS) two years ago. This system is an application layer on the Max Platform that increases safety and performance for offshore operations.


• December 2021 - Weatherford International plc has been awarded a three-year digital oilfield contract by one of the digital leaders in the upstream industry, Kuwait Oil Company ("KOC"), which aims to support its digital transformation strategy in the North Kuwait heavy oil field and implement Integrated Enterprise Excellence platform for KOC. The award also includes instrumentation, real-time monitoring, production optimization and well backup to enable KOC to optimize its production and processing plans.

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