"Actionable Insights to Fuel Your Growth"
The global Oil and Gas EPC Market size was USD 46.60 billion in 2021 and is projected to grow from USD 49.58 billion in 2022 to USD 80.77 billion in 2029 at a CAGR of 7.2% during the 2022-2029 period. The global impact of COVID-19 has been unprecedented and staggering, with oil & gas EPC contract witnessing a positive demand across all regions amid the pandemic. Based on our analysis, the global market is exhibited a higher growth of 15.4% in 2021 as compared to the average year-on-year growth during 2018-2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Oil & Gas Engineering, Procurement & Construction (EPC) includes engineering, procurement, and construction activities for upstream, midstream, and downstream oil & gas sectors. These activities include design, fabrication, construction, installation, equipment production, pre-commissioning, and maintenance contracts. Various oil and gas operators award contracts for EPC to service providers for different applications. These service providers make up the competitive landscape of this industry.
Disruption in Oil & Gas Industry to Impact Global Oil and Gas EPC Market Growth
The spread of COVID-19 had a detrimental effect on every industry, specifically the industry. The shutting down of businesses in the commercial sector, loss of industrial operational times, lower energy and power demands directly and indirectly affected the demand for oil and gas. Moreover, the excessive supply and low demand led to a massive drop in the prices during the pandemic, making businesses reanalyze their capital expenditures and reduce investments in the sector. The global industry faced a negative demand shock owing to the low number of contracts awarded in the year due to stalling of numerous projects globally.
Request a Free sample to learn more about this report.
Tremendous Demand for Hydrocarbon to Propel Growth
The demand remains high and is constantly increasing due to high consumption rate of hydrocarbons worldwide, anticipating the market's growth. To meet the extensive demand for oil and gas, government and private entities are taking the initiative to invest in the large-scale exploration of hydrocarbon.
OPEC countries in the Middle East & Africa are anticipated to dominate this industry, owing to high reserves of oil and gas, which is expected to increase the investment in the extraction of hydrocarbon by major oil companies in the world. Asia Pacific plays a crucial role in oil and gas consumption due to emerging and high potential economies such as India, China, Australia, and Malaysia. Due to the high demand, companies and government organizations are keen to increase hydrocarbon production. Thus, many contracts and agreements are underway to develop oil & gas production.
The major projects are on the bucket list to meet the evolving demand for hydrocarbon. Leading companies are very keen on exploring oil and gas, driving this sector.
Steadily Growing Oil and Gas Exploration to Augment Market Growth
Several factors are driving future developments in this market. The key elements include population growth, changing demographics, economic growth, policy changes, technology advancement, and oil prices.
The international and local government policies impact the evolution of this market, mainly focusing on eradicating hydrocarbon poverty in developing countries. The Asia Pacific records the highest consumption and demand. China was leading in the Asia Pacific in hydrocarbon production and stood in the top ten countries globally. Chinese conglomerate Sinopec, CNPC, and Sinochem are eyeing on enlarging their production facilities to meet the rising demand. India, Indonesia, and Malaysia continuously strive to enhance their home production to cut foreign exchange on importing oil and gas.
OPEC and ally countries recently pledged to cut oil production to reach the steady and fruitful market thus, concentrating on the future development of this market. The primary source of income for the Gulf countries is oil and gas, which in, turn helps to stabilize their economy. Thus, government and private agencies are focusing on increasing their production in the forthcoming years.
The U.S. is highly developed in the production of shale gas. Companies are likely to invest heftily to meet the growing demand. To increase the production of existing oil wells and explore new wells, companies employ various techniques for maximum output. Russia, Norway, and the U.K. have steadily invested in offshore oilfield development to achieve high production rates.
Industrialization and Rapid Urbanization to Bolster Growth
The world is witnessing immense growth in broad areas such as automobile, aviation, manufacturing, and construction due to substantial potential development in different industries in every corner of the world. Oil & gas plays an essential role in providing the primary energy source. Therefore, market is continuously growing.
Also, the extensive population growth has increased the demand for daily essentials. Therefore, companies are expanding their manufacturing units that require a continuous and reliable energy source. Thus, a significant portion of oil and gas is utilized in generating electricity to meet the enormous demand for energy.
The growing global transportation system, which plays a significant role in socio-economic development, utilizes many hydrocarbon products as fuel. Thus, the demand is consistent and steady, which is expected to increase exploration and production activities, thereby directly driving the market.
Growing Oil and Gas Trade Leading to Construction of New Pipelines to Augment Growth
The growing demand globally has led to the development of oil and gas fields in countries rich in resources. Therefore, there is increasing trade between producer and consumer nations. The rising energy demand and increasing trade have led to increased pipeline construction across countries for oil and gas transmission. Moreover, the massive utilization of natural gas in the end-user has advanced the development of the distribution gas pipeline network.
With growing energy demand, pipeline construction is anticipated to grow. This will result in many midstream EPC contracts for oil and gas for further sector development. This acts as a profitable opportunity for Market growth.
Increasing Renewable Energy Usage Poses a Threat to Market Growth
The frequent fluctuation in the market prices has stunted hydrocarbon exploration. The COVID-19 has highly impacted the major oil producer companies in the world.
The rise in pollution levels and serious global warming threat is a by-product of the oil and gas industries. Leaders worldwide have come together to combat these significant issues to thwart the rising GHG emission. International environment regulatory bodies and government agencies are amending and enforcing strict rules and regulations on oil and gas producing companies.
Also, the recent trend and development in renewable energy, such as wind, solar, and geothermal, have gained momentum for an alternative to oil and gas. Oil & gas investment is not viable in the long term. Moreover, the automobile industry was going through a transformation phase with the introduction of electric vehicle. Batteries are playing a crucial role, as they are accompanied with a renewable source of energy to store an enormous amount of electricity. These factors are creating barriers to the growth of this industry.
To know how our report can help streamline your business, Speak to Analyst
Numerous Construction & Installation Activities to Bolster Segment Growth in Market
The Market by contract type is broadly categorized into fabrication & equipment, construction & installation, management services, and others.
The construction & installation segment includes installation projects where a company provides services of installing platforms, pipes, pipe fittings, boiler, turbines, mud pumps, fans, engines, whereas the construction involves the building of drilling rigs, production platforms, and refineries at either onshore or offshore locations. The development of oil & gas fields and facilities has led to the domination of the construction & installation segment. This trend is expected to continue during the forecast period.
Fabrication & equipment is an integral part of this industry. It involves the fabrication contracts for various tools and important machinery parts covering valves, boiler, turbines, pipes, pipe fittings, elevators, conveyors, machine tools, industrial storage, etc. The management services type of contract includes management of labor, plants, rigs, sites, etc. The rising penetration of IoT and industrial automation has increased software integration in this industry. Companies are focusing on providing the EPC for managing such software. The others segment includes all the remaining contracts involving site procurement services, designing services, maintenance services, etc.
Growing Development of Oil & Gas Fields Will Lead to Domination of Upstream Segment
This Market is divided into upstream, midstream, and downstream based on the end-user.
Upstream operations include drilling and field development operations to enhance production volumes of oil and gas fields. The growing upstream activities, well development in onshore and offshore, and investment in gas fields are likely to propel growth in the upstream segment.
Midstream operations include the transportation of fuels from rigs to the refineries using pipelines and other modes of transport. Storage of oil and gas is also considered in the midstream segment. Increasing investment in pipeline transport and comprehensive storage solutions propels the segment growth.
The downstream activities include a refinery, sales, distribution, and marketing, requiring logistical support. Setting up refineries and increasing modifications in processing plants drive the segment growth.
Offshore Segment to Hold Lion’s Share Owing to Increasing Investments
Based on application, this market is divided into onshore and offshore. Onshore EPC projects are conducted on land.
Onshore is the traditional application sector. Growing investment in brownfield redevelopment, onshore processing facility development, and up-gradation will enhance segment growth.
Offshore EPC projects are conducted in water bodies like seas and oceans, wherein oil and gas are procured from subsea surfaces. With onshore oil wells getting matured in countries like Saudi Arabia and U.A.E., there is an increasing investment scope in offshore oil and gas field development.
Middle East & Africa Oil and Gas EPC Market Size, 2021 (USD Billion)
To get more information on the regional analysis of this market, Request a Free sample
The global market has been analyzed across major regions, including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
The Middle East & Africa has a growing industrial landscape and has a developing economy. According to the World Investment Report published by the United Nations Conference on Trade and Development (UNCTAD), the Foreign Direct Investment inflow across the Middle East & Africa was USD 76,332 million in 2020. This is anticipated to propel the industrial landscape driving the region's Oil and Gas EPC Market. In 2020, global refinery runs decreased to 76.9 million barrels per day (mmbpd) and is expected to increase to 78.9 mmbpd. In Middle East & Africa, Saudi Arabia’s refinery runs are expected to increase to 77% in 2021 vs. 68% recorded in 2020. Global gas markets also experienced their most significant recorded drop in 2020, with an estimated 2.5% year-on-year (Y-o-Y) decrease in consumption.
According to the International Energy Agency, fast-growing markets in the Middle East and sub-Saharan Africa are projected to account for about 70% of global demand growth in 2021. Iraq is endeavoring to continue the development of its gas sector. Libya finally returned to form a unity government in January 2021 for the first time in years. Provided the country solidifies its political breakthrough and progresses with governmental consolidation and legislative reforms, the upstream investments are anticipated to portray a high growth rate.
The North Sea offshore oil & gas field development, majorly in Norway, the U.K., and Russia, bolsters EPC for oil and gas in Europe. Major upstream and midstream projects have helped the region grow magnanimously. The growing downstream activities in the U.S. have propelled the development of this market in the region. North America boasts of an intricate gas distribution pipeline network, contributing to the market dynamics.
Asia Pacific heavily invests in oil, gas, and coal. Malaysian oil & gas company, PETRONAS, awarded various projects to TechnipFMC in 2021. The consistent upstream investments in the region propel the segment growth. The USD 940 million project was awarded to Saipem by Petrobras to develop SURF in the offshore field. The offshore development in the region is anticipated to propel the market during the forecast period.
Larsen & Toubro and Petrofac to Lead with Management of Large EPC Contracts
The market is fragmented, with many small players providing construction, fabrication, and installation activities to the oil & gas sector. EPC contractors are actively operating to cater to the increasing demand for EPC services, owing to the growing demand for oil & gas reserves. Key players include Larsen & Toubro, Petrofac, TechnicpFMC, McDermott, Subsea 7, KBR, WorleyParsons, and Saipem, among other players. With increasing energy demand and greenfield & brownfield development activities, this market is anticipated to grow, promoting lucrative opportunities for market players.
An Infographic Representation of Oil & Gas EPC Market
To get information on various segments, share your queries with us
The global Oil and Gas EPC Market report highlights leading regions to offer a better understanding to the user. Furthermore, the market research report provides insights into the country-level and regional markets. The latest market trends and technologies deployed are analyzed in the report. It further highlights some of the drivers and restraints, helping the reader gain in-depth knowledge about the industry.
Value (USD Billion)
By Contract Type, End-User, Application, and Region
By Contract Type
Fortune Business Insights says that the global market was USD 46.60 billion in 2021 and is projected to reach USD 80.77 billion by 2029.
In 2021, Middle East & Africa stood at USD 32.78 billion.
The market is likely to grow at a CAGR of 7.2%, exhibiting substantial growth during the forecast period (2022-2029).
The construction & installation segment is anticipated to dominate this market during the forecast period.
The tremendous demand for hydrocarbon is driving the market.
Larsen & Toubro and Petrofac are key participants operating across the industry.
The Middle East & Africa dominated the market in terms of share in 2021.
The increasing inter-continental oil & gas trade increases the demand for transport facilities. The growing demand for pipeline construction between countries onshore and offshore routes is augmenting the market.
“Kudos to your team. Thank you very much for your support and agility to answer our questions.”- Europe-based provider of solutions to automate data centre operations.
“We appreciate you and your team taking out time to share the report and data file with us, and we are grateful for the flexibility provided to modify the document as per request. This does help us in our business decision making. We would be pleased to work with you again, and hope to continue our business relationship long into the future.”- India-based manufacturer of industrial and specialty intermediates with a strong global presence.
“I want to first congratulate you on the great work done on the Medical Platforms project. Thank you so much for all your efforts.”- One of the largest cosmetics company in the world.
“Thank you very much. I really appreciate the work your team has done. I feel very comfortable recommending your services to some of the other startups that I’m working with, and will likely establish a good long partnership with you.”- U.S. based startup operating in the cultivated meat market.
“We received the below report on the U.S. market from you. We were very satisfied with the report.”- UGlobal hearing aids manufacturer.
“I just finished my first pass-through of the report. Great work! Thank you!”- U.S. based solar racking solutions provider.
“Thanks again for the great work on our last partnership. We are ramping up a new project to understand the imaging and imaging service and distribution market in the U.S.”- World’s leading advisory firm.
“We feel positive about the results. Based on the presented results, we will do strategic review of this new information and might commission a detailed study on some of the modules included in the report after end of the year. Overall we are very satisfied and please pass on the praise to the team. Thank you for the co-operation!”- Germany based machine construction company.
“Thank you very much for the very good report. I have another requirement on cutting tools, paper crafts and decorative items.”- Japanese manufacturing company of stationery products.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry