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The global oil & gas fabrication market size was valued at USD 4.86 billion in 2021. The market is expected to grow from USD 5.03 billion in 2022 to USD 6.93 billion by 2029, exhibiting a CAGR of 4.7% during the forecast period. Asia Pacific dominated the global market with a share of 36.21% in 2021.
The global COVID-19 pandemic has been unprecedented and staggering, with oil & gas fabrication experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of -23.4% in 2020 as compared to 2019.
Fabrication is vital in countless applications in the oil and gas industry. Almost all infrastructure and machinery are assembled using oil & gas fabrication. The infrastructure of the oil & gas industry is complex. An oil rig or platform is a large structure with facilities for drilling wells and extracting and processing oil and natural gas. Some of these oil platforms even have facilities to house workers. There are different oil platforms, such as fixed platforms, semi-submersible platforms, compliant towers, and others. All of these structures are built on steel legs. Many types of structural steel sections are used in oil platforms. Steel shells are structural steel profiles that are often used in the construction of oil platforms.
Decreased Oil & Gas Demand Hampered the Construction of New Oil & Gas Platforms During Pandemic
In March 2020, oil prices plummeted due to geopolitical events along with the global impact of the COVID-19 pandemic. As a result, the average number of U.S. rigs in 2020 fell 52% from 2019. After hitting a low of 244 in mid-August, the U.S. rig count has since risen to 397 as of February 19, 2021. In 2020, industrial participants’ business was impacted by the COVID-19 pandemic as customers delayed purchases and planned projects, citing COVID-related market uncertainties, permitting delays, and logistical constraints.
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Increased Automation in the Oil & Gas Industry Will Transform the Market Size
Oil & gas fabricators rely on the latest technology to meet the needs of their customers in the oil & gas industry. For instance, plasma-cutting machines are popular as they are powerful and precise enough to perfectly cut sheet metal and plates. Most models can be equipped with Computer Numerical Control (CNC) controls to automate operations. CNC is a manufacturing software that automates plasma-cutting operations. Plasma cutting machines with CNC software are typically more effective than traditional metalworking means, minimizing cutting errors and reducing turnaround times - an automated torch table can always move faster and more precisely than a human hand holding a torch. Automation is the key to getting and staying ahead of the competition as it can provide numerous benefits.
Increasing Oil & Gas Production and Exploration Activities to Augment the Market Growth
The rising oil & gas production & exploration activities, along with increasing investments in the services market, surges the demand for oil & gas fabrication. The necessity to enhance the efficiency of established and fresh reserves is increasing, rising investments in ultra-deepwater and deepwater projects, and growing emphasis on emerging unconventional hydrocarbons.
During the forecast period, rising investment in the Asia Pacific oil & gas industry and noteworthy technological development are offering opportunities for market expansion of oil & gas fabrication. The increasing oil & gas production and exploration activities, along with growing investments in the services market, surge the demand for oil & gas fabrication.
Increasing Demand and Consumption of Oil & Gas to Boost the Market Growth
The increasing demand for oil & gas due to rising utilization in several industries is one of the key drivers for the oil & gas fabrication market. Companies are likely to invest heftily to meet the growing demand. Companies employ various techniques for maximizing output to increase the production of existing oil wells and explore new wells. Russia, Norway, and the U.K. have steadily invested in offshore oilfield development to achieve high production rates.
Increasing demand for petroleum products and subsequent pressure on oil & gas companies to increase production are expected to create new opportunities for global players. The number of new refineries is increasing worldwide, increasing the demand for fabrication solutions in the facilities.
Rising Renewable Energy Usage Threatens the Market Growth
Hydrocarbon exploration has slowed down as a result of the market price’s frequent fluctuations. The major global oil producers have been significantly affected by COVID-19. A byproduct of the oil & gas industries is the rising levels of pollution and serious threats posed by global warming. To prevent GHG emissions from rising, global leaders have joined forces to combat these significant issues. Oil & gas fabrication companies are subject to stringent rules & regulations being amended and enforced by international environment regulatory bodies and government agencies. Additionally, renewable energy sources, such as wind, solar, and geothermal, have grown in popularity in recent years as an alternative to oil and gas. Oil and gas are not long-term viable options. In addition, the introduction of electric vehicles ushered in a period of transformation for the automobile industry. As renewable energy sources enable them to store a significant amount of electricity, batteries play a crucial role. Industry growth is being impeded by these factors.
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Increased Onshore and Offshore Drilling Activities Boost the Upstream Segment
The upstream segment holds most of the oil & gas fabrication market share. The segment includes exploration, production, drilling, and other activities. The increase in upstream application increases the global demand for oil & gas fabrication services. In addition, it includes onshore & offshore production and exploration activities that require production equipment, structural steel, and various other products and components.
Asia Pacific Oil & Gas Fabrication Market Size, 2021 (USD Billion)
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The global market has been analyzed across major regions, including North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa.
The Asia Pacific region accounts for majority of the global market share of oil & gas fabrication. The rising demand for fuel is one of the major growth drivers for the regional market. China, South Korea, Japan, India, and the Philippines are the major consumers of oil & gas products. They are used widely at various stages of the supply chain of oil & gas fabricated products. The above factors drive the growth of the market in this region.
North America is the most lucrative market where the oil & gas industry is concerned. The U.S. accounts for the majority of the market share in the North America region. However, Canada is working extensively to enhance the oil & gas fabrication market growth. Both countries are increasing exploration and production activities.
Europe is estimated to grow significantly due to rising exploration and production activities and increasing drilling and rig wells. All these processes involve fabricated products such as pipelines, vessels, turbines, and others.
The Middle East & Africa are also significant regions. The region accounts for most crude oil and other petroleum product production activities.
Latin America is also one of the major regions. Mexico is one of the world's largest petroleum and other liquids producers. Mexico is the fourth-largest producer in the Americas after the U.S., Canada, and Brazil. Mexico’s liquid fuel consumption has fallen during the past few years, averaging 1.9 million b/d in 2019.
Gulf Piping Company (IMCC Group) is One of the Major Players Owing to its Capability of Serving the Onshore & Offshore Oil & Gas Sector
Gulf Piping Company (IMCC Group) offers end-to-end distinguished fabrication and construction solutions for small to large-scale projects. It has a rich history of developing difficult oil and gas infrastructure projects such as rigs, offshore platforms, onshore modules, high-end manufactured products, and FPSO components. It can also rig maintenance, refurbishment, repair, and upgrade work.
An Infographic Representation of Oil & Gas Fabrication Market
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The research report highlights regional and country-level analysis to understand the user better. Furthermore, the report provides insights into the latest market trends and market analysis of technologies deployed rapidly globally. It further highlights some drivers and restraints, helping the reader extract in-depth knowledge about the industry.
Value (USD Billion)
By Application and Region
Fortune Business Insights says that the global market size was USD 4.86 billion in 2021 and is projected to reach USD 6.93 billion by 2029.
In 2021, the Asia Pacific market was valued at USD 1.76 billion.
The market will likely grow at a CAGR of 4.7%, exhibiting substantial growth during the forecast period (2022-2029).
Upstream is expected to maintain its dominant application segment in the forecast period.
National Petroleum Construction Company (NPCC) and Gulf Piping Company (IMCC Group) are some of the key players operating in the market.
Asia Pacific dominated the market in terms of share in 2021.
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