Hydraulic Workover Unit Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented 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), By Region, Competition 2018-2028

Market Overview

Key Market Drivers

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.

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.

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Key Market Challenges

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. Volatility in Oil Prices: The hydraulic workover unit market is sensitive to fluctuations in oil prices. Low oil prices can lead to reduced investment in oil and gas projects, impacting the demand for hydraulic workover services.

Environmental and Regulatory Constraints

Increasing environmental concerns and stricter regulations can pose challenges to oil and gas operations, affecting the growth of the hydraulic workover unit market. Compliance with environmental standards may require additional investments and operational adjustments.

Global Economic Conditions: Economic uncertainties and downturns can lead to a decrease in capital expenditure by oil and gas companies, affecting their willingness to invest in hydraulic workover services. Advancements in alternative technologies or methods for well intervention and maintenance could pose a challenge to the traditional hydraulic workover approach. The hydraulic workover unit market, like any other industry, can be affected by disruptions in the supply chain, which may impact the availability of key components and equipment.

Key Market Trends

Increasing demand for hydraulic workover units for offshore oil & gas operations

Increasing demand for hydraulic workover units for offshore oil & gas operations is expected to boost the growth of the global hydraulic workover unit market during the forecast period.Shale natural gas resources are a part of shale formations. They contain significant accumulations of natural gas and oil. According to the EIA (Energy Information Administration) predictions, natural gas production will reach 554 BcF/d by 2040. The largest component of the market growth is natural gas production from shale resources. It will grow to 168 BcF/d by 2040. Participating regional countries like the US, Canada, China, and Argentina have commercial shale gas production. Moreover, other countries such as Mexico and Algeria will encourage the development schedules of shale resources with the help of technological funding for improvements. Hydrocarbon’s mature fields are responsible for its past peak production. Mature oilfields have more than 70% of the world’s oil and gas production. The constant recovery of mature oil fields is increasing. 80% of these estimated reserves are found in countries like the Middle East, North America, Asia Pacific, and Latin America. Also, there has been an easy recovery from mature fields that involves extending the life of the well and improving production. For the same, various methods such as artificial lifts, intervention, and snubbing are used. Mature oil fields are a part of conventional, unconventional, or deepwater reservoirs. It depends on its permeability and the reservoir’s flow regime. Major oil & gas companies are shifting their attention toward technological advancements to cater to the decline in reserves with the help of inventing tools and techniques.

Segmental Insights

Application Insights

Onshore is the fastest growing segment, 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. 

Capacity Insights

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.