Slickline Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Slickline Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The slickline services market is expected to witness a CAGR of over 2.3% during the forecast period. Due to the COVID-19 pandemic, the oil and gas industry witnessed a significant decline in demand due to the various lockdowns and restrictions, which resulted in decreased demand for slickline services. The outspread of COVID-19 in Q1 of 2020 resulted in the delay of significant drilling projects worldwide, which in turn has affected the demand for slickline services globally. For Instance: in April 2020, Beach Energy announced a termination notice to Diamond Offshore for its year-long offshore drilling program in the Otway basin in Southern Australia with the semi-submersible Ocean Onyx, citing the logistical difficulties caused by the Covid-19 pandemic services. Factors such as the increased drilling and completion activities globally are driving the demand for slickline services. However, the volatile oil prices over the recent period, owing to the supply-demand gap, geopolitics, and several other factors, have been restraining the growth in the demand for the slickline services market.

Key Highlights

• The onshore segment is expected to have the maximum share in the market in 2021. Onshore drilling encompasses all the drilling sites located on dry land and accounts for 70% of worldwide oil production.
• The increasing oil and gas discoveries, coupled with the liberalization in the industry globally, have been leading to the creation of new opportunities for the players to invest in global players.
• North America is estimated to have the maximum share of the slickline services market in 2021. The growth rate of the South America region is expected to be the highest during the forecast period, primarily due to the rapidly increasing oil and gas activities in the region, over the forecast period.

Key Market TrendsOnshore Segment to Dominate the Market

• Onshore drilling encompasses all the drilling sites located on dry land and accounts for 70% of the worldwide oil production. Onshore drilling is similar to offshore drilling but without the difficulty of deep water between the platform and the oil.
• The global crude oil prices have shown signs of recovery and are improving at a good pace, and the onshore projects are easier to kick start than offshore ones. Therefore, riding on the optimism associated with the recovery of crude oil prices, onshore projects are expected to record significant growth over the forecast period, in turn driving the demand for the slickline services market.
• Oil consumption worldwide reached 94,088 thousand barrels daily in 2021, up from 86,568 thousand barrels daily in 2010. Thus with an increase in oil demand, new oil wells are expected to be drilled in the coming years, resulting in an increased demand for slickline services worldwide.
• In 2021, ADONOC Drilling (drilling subsidiary of ADNOC) awarded a five-year USD 3.8 billion contract with Adnoc Onshore for the continued provision of drilling, workover, and other well services.
• In 2021, Saipem was awarded new onshore drilling contracts in the Middle East and South America. The new contracts are worth a total of USD 70 million.
• Hence, with the new investment in the onshore oil and gas industry, increasing exploration of unconventional resources, and the crude oil price stability, which in turn are expected to increase the demand for slickline services market globally.

North America to Dominate the Market

• North America is expected to dominate the slickline services market and is expected to grow at a significant rate over the forecast period.
• In North America, offshore oil and gas projects are becoming more competitive, owing to improving efficiencies and tightening the supply chain, which led to declining offshore drilling costs.
• In terms of policy and government support, the United States federal government launched an auction of more than 80.9 m acres to be leased by the United States government for oil and gas production in 2021.
• The recent development of shale plays, horizontal drilling, and fracking resulted in a massive increase in the country's demand for drilling and completion fluids. For instance, in 2020, extensions and discoveries of 92 million barrels of new proved crude oil reserves were reported, mostly from operators drilling horizontal wells in the Uinta Basin, Colorado, United States.
• The annual oil output of Mexico has been dropping over the years, as the giant Cantrell field in the shallow waters of the Gulf of Mexico is drying up. However, the Mexican government is trying to increase private investments in its controlled areas of the Gulf of Mexico. For instance: in Mexico, private sector firms announced 12 commercial oil and gas discoveries in Mexico between 2017 and 2020.
• Therefore, increasing oil and gas drilling and completion activities in the region are expected to increase the demand for slickline services market over the forecast period in the North American region.

Competitive Landscape

The slickline services market is partially consolidated, due to the small number of companies operating in the industry. The key players in this market include Schlumberger Limited, Halliburton Company, China Oilfield Services, Weatherford PLC, and Baker Hughes Company.

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