Global Well Testing Services Market - 2024-2031

Overview

Global Well Testing Services Market reached US$ 8.2 billion in 2023 and is expected to reach US$ 13.5 billion by 2031, growing with a CAGR of 6.4% during the forecast period 2024-2031.

The replacement of coal with cleaner burning fuels in emerging nations will fuel demand for natural gas. As such, we expect the demand for well testing services to increase exponentially during the forecast period. Turkmenistan and Qatar, among the largest natural gas producers, are undertaking significant steps to augment production.

The long term growth prospects for the global market could be hampered by the restriction of financing from banking institutions. In pursuit of environmental, social and governance (ESG) metrics, banks are starting to restrict financing to new fossil fuel projects.

Development of New Offshore Oil and Gas Deposits

Despite the ongoing churn towards renewable energy sources, fossil fuels remain the mainstay of global energy demand. The International Energy Agency (IEA) estimated that global energy demand witnessed a growth of about 2.2 million bpd in 2023, leading to an yearly increase of 102 million bpd over 2022. As production plateaus at existing onshore oilfields, oil and gas production companies are looking to tap offshore reserves.

New commercial reserves of oil and gas have been discovered in South America, mainly off the coast of Guyana and Suriname. In October 2023, a major offshore oil and gas discovery was made in the Stabroek block off the Guyanese coast, which covers nearly 26,800 square kilometers. Commercial production is expected to commence before the end of the decade. The development of new offshore deposits to supplement global production will drive new demand for well testing services.

Decommissioning of Old Wells

Although the discovery and exploitation of new reserves is augmenting the global oil production, stagnating and depleting production at existing reserves, especially at long producing sites in middle east and South America, has warranted their decommissioning, since older wells cannot justify continued operational expenditure. To prevent major contamination, old wells are decommissioning according to stringent protocols.

Well testing is the first step in the decommissioning process, where the well's physical condition is assessed for any kind of leaks or hazards. The evolving dynamics of the global oil and gas industry means that decommissioning of old and abandoned oil well will pick up pace over the medium and long term, further inducing demand for well testing services.

Volatility in Global Oil Prices

The demand for well testing services is closely tied with the movement in global crude oil prices. A sharper appreciation in oil prices creates a significant increase in demand for well testing services as producers seek to increase output and take advantage of high prices. Similarly, a drop in global oil prices creates a slump in demand for oil testing services, given the fact that oil companies avoid major capex activities.

Newer oil production technologies such as tar sands and fracking require oil prices to remain above US$ 100 in order to be commercially viable. Therefore, even a sustained period of fluctuation in oil prices can trigger uncertainty and can led to cessation of new production. Therefore, oil price volatility will continue to remain the key factor in hampering future expansion of the market.

Segment Analysis

The global well testing services market is segmented based on type, stage, application and region.

Onshore will Continue to Account for a Large Share of the Global Market

Although most of the current oil and gas discoveries in recent years has come from offshore oil wells, we expect the onshore wells to still continue to account for a major share of the global market. One factor behind this phenomenon is that it is relatively easier and cost-effective to undertake well testing onshore. The ongoing expansion of production at onshore fracking wells in North America will continue to generate demand for well testing services.

Comparatively, offshore well testing requires significant capital expenditure and involves various technical challenges. Furthermore, despite the promise of tapping new reserves, many exploration companies are finding it difficult to undertake new offshore well testing due to the reluctance of banks and financial institutions to provide new loans.

Geographical Penetration

Middle East and Africa Continues to Retain the Largest Market Share

Despite moving towards economic diversification, the war in Ukraine and the resultant upheaval in global energy prices, have put focus back on the middle east as a stable energy source. Furthermore, the current global focus is on tapping the region's large reserves of natural gas. Qatar, which has the largest natural gas deposits is currently undertaking major expansion of LNG production in anticipation of growth in global demand.

Other middle eastern countries are also looking to expand their domestic oil and gas production. In February 2024, U.S. Import-Export Bank gave financial backing to Bahrain for undertaking the end-to-end exploration, drilling and testing of 450 new oil wells. The Middle east will continue to account for a large share of the global market during the forecast period.

COVID-19 Impact Analysis

The pandemic precipitated a collapse in demand for fossil fuels, especially from the transportation sector. It led to such a severe crash in oil prices, that prices even turned negative for a brief period in April 2020. The oil price crash led to a complete halt in demand for well driving services as most oil and gas producers halted capital investments.

With signs of economic recovery and the lifting of lockdown restrictions, many oil producers began to aggressively increase production in anticipation of a demand spike. Such an increase in production led to a significant demand recovery for oil well testing services, especially as producers sought to explore and develop new oil wells.

Russia-Ukraine War Impact Analysis

The Russia-Ukraine war created major opportunities for the global well testing services market, particularly in the middle east. Due to the outbreak of the war, many countries in Europe and North America, particularly U.S., imposed sanctions on Russian oil exports. As a result, due to demand for alternative energy sources, middle eastern countries are ramping up production in order to fill in the gap.

The sanctions imposed on Russia also led to an exodus of western oilfield service companies, who accounted for the overwhelming majority of the demand for well testing. As a result, Russia has struggled with the exploration, development and production of new oil wells and is unable to raise production.

By Type

• Downhole
• Real-Time
• Reservoir Sampling
• Surface Well Testing Services
• Subsea Services
• Others

By Stage

• Exploration
• Appraisal
• Development
• Production

By Application

• Onshore
• Offshore

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In November 2023, Expro, a U.S.-based full cycle energy service provider, bagged a contract from Equinor, Norway's state-owned oil and gas corporation for well testing services of the Norwegian offshore field.
• In October 2023, SDX Energy, a UK-based oil exploration company focused on the middle east, announced that it had carried out successful well testing of the Ksiri-21 well in the Gharb basin, off the coast of Morocco.
• In February 2024, 88 Energy Ltd, a U.S.-based energy services company, announced that it had made significant progress in carrying out extensive testing at the Hickory-1 onshore oilfield in Alaska, U.S.

Competitive Landscape

The major global players in the market include GrafTech International, Well Testing Services India Limited, Nippon Well Testing Services Industries Co. Ltd, Tokai Carbon, HEG Limited, Energizer Resources Inc., Focus Well Testing Services Inc.,Showa Denko K.K., Sangraf International and Amg Advanced Metallurgical Group N.V.

Why Purchase the Report?

• To visualize the global well testing services market segmentation based on type, stage, application and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of pouch tapes market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global well testing services market report would provide approximately 57 tables, 53 figures and 197 Pages.

Target Audience 2024

• Oilfield Service Companies
• Oil & Gas Companies
• Commodity Trading Companies
• Industry Investors/Investment Bankers
• Research Professionals