Hydraulic Workover Unit Market Size, Share & COVID-19 Impact Analysis, By Service (Workover, Snubbing), By Capacity (Below 150 Tonnes, 151-200 Tonnes, Above 200 Tonnes), By Installation (Skid-Mounted, Trailer-Mounted), By Application (Onshore, Offshore) and Regional Forecast, 2021-2028

The global hydraulic workover unit (HWU) market size was USD 8.11 billion in 2020 and is anticipated to grow from USD 8.59 billion in 2021 to USD 13.21 billion in 2028 at a CAGR of 6.4% in the 2021-2028 period. The global impact of COVID-19 has been unrivaled and staggering, with it witnessing a negative demand across all regions amid the pandemic. Based on our analysis, the global hydraulic workover unit (HWU) market exhibited a decline of -14.5% in 2020 compared to the average year-on-year growth during 2017-2019. The growth during the forecast period is attributable to this market's demand and growth, returning to pre-pandemic levels once the epidemic is over.

The noteworthy development in technology for oil and gas purposes has increased the demand for this equipment worldwide. The revolution in various fields such as automotive, energy, and digitalization has led to industrialization and urbanization, making it vital to boost crude oil production. The increase in brownfields coupled with a surging energy demand has made this market relevant.

Descent in Oil and Natural Gas Demand to Harm Hydraulic Workover Unit Market Growth amid COVID-19

The COVID-19 pandemic initiated by the spread of the novel coronavirus has had a damaging impact on the global industrial landscape. This industry faced significant losses and have had to reduce operations due to the imposition of rigorous lockdowns to contain the spread of the COVID-19 virus. Consequently, the outbreak of the virus has transformed the demand for HWUs.

As the hydraulic workover unit industry is majorly dependent on oil and gas activities, the decline in oil prices in a long time has significantly impacted the investment in the instrument. The imposition of lockdowns in various countries and the shutting down businesses except for essential services with minimal workforce affected the energy demand. This factor has directly impacted work in the well interventions sector.

LATEST TRENDS

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Amplified Investment In Offshore Oil and Gas Developments to Enhance HWU Demand

In July 2019, Kuwait signed a USD 600 billion offshore exploration contract with Halliburton. The contract aimed to drill six exploration wells in the next two to three years, which is anticipated to increase around 100,000 b/d in the forecast period. The United Arab Emirates invested approximately 31,000 square kilometers of acreage for offshore oil gas production, majorly in the Abu Dhabi and Ras Al Khaima regions. In January 2020, Russia announced a significant investment of around USD 300 billion for new offshore oil and gas projects.

The world is likely to derive massive oil and gas from offshore production. The more arduous production conditions in offshore locations increase the investment in more complex and newer technologies like hydraulic workover units. The onerous requirement for offshore with ease of operations is the primary market driver during the projected period.

Growing Demand for Efficient Technology to Drive Market Growth

There is a substantial increase in demand for developing a safe, versatile, and cost-effective tool for workover and well intervention operations due to the increasing number of mature oil fields. This factor bolsters the demand for HWUs globally. This equipment can be efficiently used with low setup times and are more cost-effective. Earlier workover rigs were used for similar operations, which took a lot of time and effort to be set up and used. Further, the wells had to be killed before operations, However, with newer technologies, HWUs with snubbing capabilities have made snubbing capabilities possible with newer technologies.

In 2021, MEIL, India started manufacturing a new type of HWUs with indigenous know-how, especially for the local market. The increasing demand for more effortless functioning, avoiding well-killing, secure and cost-effective well intervention units is an important trend for the hydraulic workover unit market.

DRIVING FACTORS

Increasing Focus on Brownfields to Bolster Market Growth

A mature oil and gas field is past peak production. These oilfields account for a majority of the world's crude oil production. With enhanced technological approaches like enhanced oil recovery (EOR), the recovery of mature oil fields has seen a tremendous increase. Increasing recovery from mature fields has necessitated prolonging the well and improving production using well interventions and workover.

With the deterioration in oil reserves, companies have increased their focus on inventing equipment required to access remaining reserves on mature wells. The prime focus is to improve recovery and prolong life. But the amplified water cut with constrained topside facilities, growing flow assurance problems, rising operating costs, and integrity issues because of the maturing facilities have made brownfield operationally and economically impractical. The increasing requirement for workover services is anticipated to bolster the market growth.

Increasing Energy Requirement to Propel Demand

The growing population explosion and urbanization has resulted in a spike in energy requirement from the various end-user sector. As renewable energy is still in an early adoption stage of its product life cycle, the majority of power generation is handled by hydrocarbons. Due to inadequate development of other energy sources, the growing global oil and gas demand enhances well drilling and maintenance. The increase in crude oil and shale gas production capacities and an increasing number of brownfields is expected to enhance the well workover and intervention demand, fueling the market growth.

RESTRAINING FACTORS

Increasing Consumer Obligation Towards Renewable Energy to Restrain Market Growth

The primary factor restraining the hydraulic workover unit market growth is the consumer shift towards clean fuels. The increasing requirement of the renewable energy sector will undoubtedly decrease the investment being made in the oil and gas energy sector, which will harm the well intervention sector. The increasing proportion of power generation using renewable energy can hinder the principal investments being made for oil and gas. Also, the necessity to reduce carbon emissions has powered the acceptance of renewable energy, with government incentives being granted worldwide. Further, the developing competence of renewables for power generation with durable benefits can result in increased adoption over conventional fuels.

SEGMENTATION

By Service Analysis

Workover Segment to Safeguard High Share Due to Majority of Services Present in Segment

The market by service is segmented into workover and snubbing.

The services carried out by hydraulic workover units are completions, plug & abandonment, ESP completion, sand screen installations, well deepening, fishing/clean-outs, casing repairs, etc. Workover segment includes operations over dead-wells, while snubbing involves installing or removing pipes in or out of live wells. The increasing demand for dead wells' services due to the high number of brownfields is critical for the workover segment. The workover segment involves a broader range of services, making the segment significant.

The snubbing market segment is gaining traction due to increased demand for performing operations of live-wells and avoiding well killing. The rising popularity of snubbing services is anticipated to propel the snubbing segment of the market.

By Capacity Analysis

Rising Requirement of High Pull Capacity Will Drive Above 200 Tonnes Segment Growth

Based on the capacity, the market can be primarily split into below 150 tonnes, 151 – 200 tonnes, and above 200 tonnes.

The concentrated portion of the equipment manufactured and utilized is above 200 tonnes due to its massive pull capacity required in large brownfields for various services. They are also majorly used in deepwater and ultra-deepwater wells.

The 151-200 tonnes segment finds its usage in medium-sized oilfields. The below 150 tonnes HWUs are used for smaller and easier services on small oil wells.

By Installation Analysis

Rising Offshore Applications Will Drive Skid-Mounted Segment Growth

Based on the installation, the Hydraulic Workover Unit market can be primarily split into skid-mounted and trailer-mounted.

The concentrated portion of the equipment manufactured is skid-mounted due to its ease of setup and utilization in onshore and offshore activities.

The trailer mounted HWUs are more portable and require less space but can be used only in onshore applications. Due to rising demand from the offshore segment, the skid-mounted segment is growing at a high CAGR.

By Application Analysis

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Onshore Segment to Dominate Backed by Maximum Share of Onshore Oil Production

Based on the degree of utilization in various applications, the market is segmented into onshore and offshore.

Due to the high oil production from the onshore segment and the larger number of onshore oil rigs, the segment dominates the market. Moreover, most of the onshore oil rigs are mature and drive significant demand for the market.

The offshore segment is increasing faster due to the rising shift towards offshore and increasing complexity of operations that demands easy to set up equipment like the HWUs.

REGIONAL INSIGHTS

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North America to Dominate Market due to Rising Proportion of Mature Oilfields

The market has been analyzed across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

The North American region holds a significant share in the market due to the high adoption of workover and snubbing services, coupled with demand for ease and efficiency of operations and technological advancement. Also, the rising proportion of mature oilfields in the region drives the market. Additionally, the government norms to reduce emissions led to companies finding it unviable to increase exploration and an increased necessity to prolong existing oil wells and drive the region's market.

Middle East & Africa is the second-most dominant market due to the increased proportion of mature oil wells in the region. The GCC countries contribute to a majority of the demand for the equipment in the region.

China dominates the market in the Asia Pacific. The rapid industrialization and urbanization, which has led to increased energy demand, is a significant driver for the market. The offshore development, coupled with maturing offshore sites in Europe, drives the region's demand for HWUs.

KEY INDUSTRY PLAYERS

Balance Point Control and Halliburton to Lead with Investments in Technological Improvements

The competitive landscape for the hydraulic workover unit study shows that very few current companies have invested widely in research and development. The market has seen substantial recent technological advancements to keep pace with the best manufacturers. Considering all the scenarios, Balance Point Control and Halliburton are the major companies that have invested in developing HWUs. They are anticipated to continue being the key players in the future.

LIST OF KEY COMPANIES PROFILED:

• Baker Hughes (U.S.)


• Halliburton (U.S.)


• National Oilwell Varco (U.S.)


• Velesto Energy Berhad (Malaysia)


• Canadian Energy Equipment Manufacturing FZE (United Arab Emirates)


• Schlumberger (U.S.)


• Precision Drilling Corporation (Canada)


• Archer (Norway)


• CUDD Energy Services (U.S.)


• Easternwell Pty Ltd. (Australia)


• PT Elnusa Tbk. (Indonesia)


• High Arctic Energy Services (Canada)


• Key Energy Services, LLC (U.S.)


• WellGear Group B.V. (Netherlands)


• Balance Point Control (Netherlands)


• Superior Energy Services (Australia)


• Cased Hole Well Services (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• April 2021 - Megha Engineering and Infrastructures Limited (MEIL) started manufacturing advanced hydraulic technology rigs with indigenous knowledge for the oil and gas sector. The development of HWUs commenced in the Kalol oil field near Ahmedabad, Gujarat. This manufacturing project was taken up to support the Government of India's 'Make in India' initiative. 


• July 2021 - In its quarterly results, Norwegian Energy Company ASA announced that the Noble Sam Turner drilling program began a well workover and maintenance campaign in spring 2021 and completed three well workovers, which contributed to almost 2000 bpd bringing positive results on operating performance during the second quarter. The use of HWUs significantly contributed to the success of the campaign.

REPORT COVERAGE

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The global hydraulic workover unit market research report highlights the leading regions worldwide to understand the user better. Also, it provides insights into the latest market trends and analyzes technologies deployed rapidly with market statistics. The report highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the industry.

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